A Cost Effectiveness Analysis of Large and Small Classes in the University

Abstract

Using university cost data and student data collected from principles of economics classes at a medium-sized public university, this article analyzes a university policy to dramatically increase class size. We find that substantial monetary savings are realized by offering large classes. Although large classes do not produce a loss of learning, their students have a 38% decreased probability of enrolling in future economics classes. These results suggest that the monetary savings that universities receive from dramatically increasing class size may translate into a loss of enrollment for the university or an internal reallocation of resources between departments.