In defending the University's policy, President Bill Powers has pursued a line of argument that mirrors our discussions in class of externalities. Powers has not focused on the gain for individual students who otherwise would not have been admitted to the University, but rather on the university-wide gains that stem from a diverse student body. As part of a statement that can be seen here, Powers said:
"diversity- ethnic and otherwise- benefits all of the students on our campus."Under this interpretation of the policy, the presence of minority students generates a positive externality through its positive effects on the educational experiences of all students. I found this perspective an interesting alternative to the interpretation of affirmative action policies a means of correcting for some bias or historical wrong.
It is not clear to me how to incorporate property rights- and thus the Coase Theorem- into this interpretation, but maybe someone can provide that in a comment.
This video presents an alternate interpretation of diversity:
1 comment:
I would like to expand on the subject of externalities in regards to diversity and school admissions.
The University of Texas president makes the argument that diversity benefits all the students on the campus by exposing them to different people and walks of life than they would encounter had no affirmative action taken place. This seems to me to be an essentially paternalistic, normative argument. That is, diversity is inherently desirable over homogeneity because it "enhances" students' worldviews. I think it is unlikely that there is a quantifiable, measurable economic cost to attending a more homogeneous university compared to a diverse one in terms of future earnings foregone. Even if such a causative relationship exists, it is not the fundamental argument that the president makes.
Rather, he simply assumed that diversity is a positive externality. Yet it is easy to envision a case in which some students may view diversity as a negative externality, because they have preferences for a homogeneous population. Other students may feel that they have major gains due to diversity, while still others may feel there are moderate gains or are indifferent to diversity.
This raises questions of how to determine the size of an externality that does not have an explicit economic cost or benefit, or even whether it is net positive or negative over the summation of the utility functions of the individuals in a population.
It should be noted that there may be an additional externality--that the students admitted due to affirmative action could have worse academic performance. If we make the assumption that diversity is a positive externality, and the lowering of the academic quality of one's peers is a negative externality, then affirmative action would be associated with two external outcomes. In this case, the optimal quantity of affirmative action would be where the marginal cost and marginal benefit of additional affirmative action are equalized (where distance between total benefit and total cost is greatest).
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