What’s the Payoff for the ‘Country Club’ College?

For the past 15 years or so, colleges have experienced a tremendous building boom, and the most publicized aspects of the boom have been the amenities: the climbing walls, the swank student unions, and the luxury dorms.

Even in the midst of a national financial crisis, the buildings seemed to get more opulent. The Wall Street Journal, for example, recently noted the “resort living” on college campuses. A new residence hall at Saint Leo University, in Florida, features a 2,100-gallon aquarium, a relaxation room with futuristic “spherical nap pods,” big-screen televisions, and more, according to The Tampa Tribune. A Saint Leo sophomore called it “ridiculously amazing.”

Other people—particularly those predicting a shakeout for higher education—might call it just plain ridiculous. Shouldn’t higher education put more money into, um, education and less of this stuff?

That depends on the college, according to Brian Jacob, Brian McCall, and Kevin M. Stange, all at the University of Michigan at Ann Arbor. In a new paper published by the National Bureau of Economic Research, they analyze the “college as country club” and the pressure on institutions to cater to students’ desire for “consumption amenities.”

To some extent, the Michigan researchers found what you might expect: “More selective schools have a much greater incentive to improve academic quality” because that is valued by the high-achieving students that they are trying to attract, the researchers write. “Less selective (but expensive) schools, by comparison, have a greater incentive to focus on consumption amenities.”

But one aspect of their conclusion is startling: The less-selective colleges might actually harm their enrollment by spending more on instruction. “One important implication is that for many institutions, demand-side market pressure may not compel investment in academic quality, but rather in consumption amenities,” they write. “This is an important finding given that quality assurance is primarily provided by demand-side pressure: the fear of losing students is believed to compel colleges to provide high levels of academic quality. Our findings call this accountability mechanism into question.”

In other words, one would think that market forces would reward colleges that invest in teaching and academics, and that we would have better colleges over all because of that market pressure. But it turns out, the researchers say, that prospective students of the less-selective colleges may care more about investment in the “resort” experience of college, and hence academic quality may not be enhanced by market forces.

The researchers say there’s a parallel in health care, “where patient amenities are a much stronger driver of hospital demand than clinical quality.”

Mr. Jacob, Mr. McCall, and Mr. Stange readily acknowledge that their paper does not address how those trends affect students and taxpayers. And they point to a need for more research on this market pressure, with a particular emphasis on the implications for competing institutions.

Surely, any close observer of higher education would recognize the effects of the building boom and their long-term consequences. A number of colleges have high debt loads and crippling deferred maintenance, which will become more burdensome as buildings age.

After noting the debt-rating downgrade at the College of New Rochelle last week, I couldn’t help but notice our previous coverage of the college: We had written up New Rochelle’s $28-million wellness center, designed by the well-known firm ikon.5, in 2008.

The amenities arms race may attract students and publicity in the short term, but in the long term the strategy might be a risky game.