The Economics of ALN: Some Issues

Lanny Arvan


This paper examines the social cost of ALN. This social cost is considered from several vantage points. First, student time is identified as the primary input in instruction. This time investment is not forthcoming automatically - several incentive problems must be resolved to elicit it. The resolution of these incentive problems entails additional cost. Second, the relationship between ALN and economies of scale in instruction is discussed. One channel for increasing returns is the better matching of instructor attributes with the demands of the course. This happens because the matching occurs in a global "market" rather than a market internal to the educational institution. Third, since distance ALN requires no brick and mortar investment, the paper considers how institutional commitment to quality instruction can be had without the brick and mortar. If there are institutional-specific investments associated with learning how to run a distance-ALN program, then institutional reputation is the likely mechanism. Otherwise, the labor market will require external verification, such as having students in ALN degree programs pass a series of standardized exams, to value such an ALN degree.


ALN,Student Time,Increasing Returns,Quality Assurance

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