THE TEACHING ECONOMIST - William A. McEachern                 

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Issue 47, Fall 2014

William A. McEachern, Editor


Television once held bright promise for a low-cost education. NYU partnered with CBS for 25 years with Sunrise Semester. That ended with a whimper in 1982. National Educational Television left the scene in 1970, replaced by the Public Broadcasting Service, and documentaries morphed into Downton Abbey. Now comes online courses, massive open online courses (MOOCS), and still more promise of a bright future for a low cost education. No question, the Internet has been a game changer, and this time the revolution may succeed. The low marginal cost of adding another student online has gotten everyone's attention, especially during these tight budget times. Sure, the fixed costs of setting up an online course can be substantial, but those costs have been falling, thanks to better and cheaper educational software. Although some of the initial enthusiasm for online courses has waned a bit of late, the movement progresses with more courses incorporating online elements to various degrees. The question remains: are online courses reasonable substitutes for live courses?

In 2010 the U.S. Department of Education (DOE) reviewed the empirical literature comparing results of live versus online instruction. This meta-analysis initially identified more than a thousand studies, but only fifty of those met DOE criteria for comparability. After reviewing those fifty, DOE researchers concluded that "Students in online conditions performed modestly better, on average, than those learning the same material through traditional face-to-face instruction." That looked like a free lunch if there ever was one. Online instruction, which was seen as becoming less costly over time, was found to be "modestly better" than live instruction. See "Evaluation of Evidence-Based Practices in Online Learning," DOE, 2010, at

It didn't take long for that finding to be challenged. Some observed that only seven of those fifty studies involved undergraduate or graduate students enrolled in term-long courses. And those seven studies, on balance, showed no significant advantages or disadvantages for online courses. Still, a tie would have to favor the online courses because of a cost advantage. Let's take a look at three studies that appeared after the DOE review was completed -- two involving economic principles and one that tracked individual students over time.

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