"Studying Overseas still Costs more"

By Paul Andrew Bourne, MSc. (candidate), Bsc. (Hons) Demography /Economics; Dip Edu.


On Sunday May 9, 2004, an article written by Mr. Mark Thompson appeared in the Sunday Herald under the caption, Studying overseas still costs more than in Jamaica, in reference to the undergraduate programmes offered by the University of the West Indies, Mona Campus. Such an article was written without any understanding of the epistemological framework of economics. Why? The author does not understand the critical principles of the deflator and Purchasing Power Parity (PPP); that absolute prices in different countries cannot be meaningful compared by only applying the exchange rate; goods are not valued the same way in different countries. Even more importantly, he did not mention that there are other factors to be considered that add a qualitative dimension to the debate.

Mr. Thompson missed the mark entirely so much so that he must be held accountable for such a blatant error. As such, this article is primarily designed to correct the fundamental flaws upon which Mark's comparative analysis was based and made applicable.


Thompson's price valuation of undergraduate tuition fees

Let us begin with the Thompson's price valuation of undergraduate tuition fees of different universities in comparison to the University of the West Indies, Mona Campus. In paragraph four (4) of his article, he gave an average tuition fee of US$11,700 for universities in the United States in comparison to $127,738 in Jamaica. Mr. Thompson only applied the present rate of Ja. $ 60 to 1US$ which gave him Ja. $702,000 to which he compared with Ja. $ 127,738 to make the comparison between undergraduate tuition fee in Jamaica and that of the United States. Wow! He did not stop there as his enthusiasm led him further in doing a similar valuation for Canada and United Kingdom. What is wrong with such an error and is it fundamental so much so that it would warrant a recalculation on his path? Answer - Yes!

JUSTIFICATION OF THE COMPARATIVE COSTS INACCURACIES

Why do some people with little training in economics speak so much of the discipline to which they know little? Answer - for this very purpose, writing!
Mr. Thompson, in order that comparative analytical technique be applied to price structures in different countries as it relates to goods and-or services, one cannot only just multiply absolute prices in one country by the exchange rate of other countries or for that matter by any other soft or hard currencies then do any comparison.
Justification: As if such a principle was correct, economists in seeking to compare Gross Domestic Product (GDP) or Net National Product (NNP) of Jamaica, Canada and United Kingdom for that matter would only multiply the exchange rate of Ja. to Can, Ja. to Sterling, Ja. to US $ by the absolute valuation of Jamaica's GDP then argue about the standard of living of those countries involved. Question - Mr. Thompson, is this the case?

Mr. Thompson, let us for one second assume that you are correct. Jamaica's GDP is US$ 8 billion in comparison to that of Barbados US$ 2.8 billion and Bahamas US$ 4.785 billion (SOURCE: World Facts Now - Data-Maps and World Bank Group, statistical data) can we safely argue that the peoples of Jamaica are enjoying a better standard of living in comparison to the other two (2) countries herein. Answer -no! As there are many other factors which must be applied before one can come to such conclusion. These factors are as follows:
i. Human development- quality of education of the populace
- quality of health care
ii. component of items included in calculations
iii. rate of inflation
iv. rate of unemployment
v. and other economic and social factors


Further, Mr. Thompson, the price structure in Jamaica is different from that in United Kingdom, Canada and the United States and so by applying the exchange rate to absolute valuation of prices cannot be used as a based upon which any meaning comparison is thereafter used. As such, your evaluation and comparative analysis are incorrect. This error is similar to that of multiplying 0 by 4 and having a result of a non-zero integer.

Can we compare developed countries with a developing country? We cannot just simply apply the exchange rate to absolute price valuations in each country and make any economic inference there from. For this very purpose, standardization of prices must be used. Further, we cannot compare developing countries that are innately at a disadvantage by their very nature of high inefficiency, geographic locality, size, topology, and low levels of technologies, high dependence on primary product and a corruption system to advanced societies of this world - such as Canada, United States and United Kingdom.


To bring the analysis to an even higher level, the argument posited by Mr. Thompson is fraught with ecological fallacies; half lies and is supported by the greatest lie of them all: unsubstantiated statistics. In using the statistics to support such a spurious argument he has succeeded in showing no application of knowledge, but merely an ability to read and reproduce without comprehending.

I therefore question the rationale for Mr. Thompson writing such an article at the present time. Is it that he is implying that Jamaican students can afford to pay more for tuition in Jamaica? Or is it that he is agreeing with the World Trade Organization that we should liberalize education and not provide subsidies to our education system? On both counts, it is my opinion that Mr. Thompson not write in such an abstract way and befuddles the minds of readers and the minds of academics - baked reasoning and emotional analysis.

In concluding, Mr. Thompson I implore you and request that you recalculate those figures by applying a deflator and the Purchasing Power Parity after which you should republish those findings. Continuing, Mr. Thompson before you go recalculating those figures, I ask of you to consult learned individuals in the field.

Although this may be within a Jamaican context, "Do you believe that studying overseas cost more than your native country?"