Opportunity Cost Neglect in Higher Education

Last registered on February 04, 2025
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Pre-Trial

Trial Information

General Information

Title
Opportunity Cost Neglect in Higher Education
RCT ID
AEARCTR-0008375
Initial registration date
October 13, 2021

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
October 15, 2021, 3:17 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated
February 04, 2025, 10:48 AM EST

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Country
Germany
Region

Primary Investigator

Name
Raphael Brade
Affiliation
ifo Institute
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Other Primary Investigator(s)

PI Name
Oliver Himmler
PI Affiliation
University of Erfurt, Max Planck Institute for Research on Collective Goods
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PI Name
Robert Jäckle
PI Affiliation
Nuremberg Institute of Technology
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PI Name
Lars Behlen
PI Affiliation
Nuremberg Institute of Technology
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Additional Trial Information

Status
Completed
Start date
2021-10-01
End date
2024-03-14
Keywords
Education
Additional Keywords
Higher Education, Opportunity Cost Neglect
JEL code(s)
I23, C93
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
Recent advances in the economic literature find that people don’t consider opportunity costs when making decisions. This is in contrast to economic theory, which assumes people consider the costs of missing the benefit of the next best alternative when making a decision. However, the literature also points out that explicitly showing opportunity costs helps individuals to take them into consideration. While the positive effect of making opportunity costs explicit has been shown in consumer market research, there is no literature in the field of higher education. Against this background, we will test two different information treatments with students from 21 different study programs. One informs them about future earnings and the other one points out the opportunity costs of long study durations.
External Link(s)

Registration Citation

Citation
Behlen, Lars et al. 2025. "Opportunity Cost Neglect in Higher Education." AEA RCT Registry. February 04. https://doi.org/10.1257/rct.8375-3.1
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
The intervention is conducted with an incoming cohort of first-year university students studying towards 21 different degrees. In all experimental groups, students will receive information per postal letters twice during their first semester.
Intervention (Hidden)
Students will receive the letters approximately three weeks into the semester and about six to four weeks before the beginning of the exam period. Depending on the experimental group, the letters include the following information:

Control: Letters for students in the control group contain information about counseling and information services offered by the university. This information is also publicly available on the web page of the university.

Earnings information (EI): The letters include the same information that the control group receives. In addition, they contain information on the average gross starting salary per year of recent graduates who studied the same program as the individual that receives the letter.

Opportunity cost (OC): The letters include the same information that the earnings information group receives. In addition, students receive the information that each additional semester of studying can lead to the loss of approximately half of the salary stated in the EI letter.
Intervention Start Date
2021-10-14
Intervention End Date
2022-03-14

Primary Outcomes

Primary Outcomes (end points)
Our primary outcomes are academic achievement dimensions that are directly related to study duration. Therefore, we consider the following set of outcomes at the end of the first semester: course credits signed up for, course credits attempted, and course credits passed. Outcomes are collected using administrative data provided by the university.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
We plan to study whether students trade off performance increases on the primary outcome dimensions with decreases on other outcome dimensions (grade point average, dropout, and non-cognitive outcomes). In addition, we want to study whether treatment affects students’ expected earnings. Non-cognitive outcomes and expected earnings will be measured with online surveys, all other outcomes are collected using administrative data provided by the university.
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Students will be randomly allocated to a control and two treatment groups.
Experimental Design Details
Randomization Method
Blocked randomization using Stata and R.
Randomization Unit
Student-level
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
2,222 students
Sample size: planned number of observations
2,222 students
Sample size (or number of clusters) by treatment arms
Group 1: 739
Group 2: 740
Group 3: 743
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Ethics Committee of the University of Erfurt
IRB Approval Date
2021-09-28
IRB Approval Number
N/A
Analysis Plan

Analysis Plan Documents

Pre-Analysis Plan: Opportunity Cost Neglect in Higher Education

MD5: 6518618d757dedf63e623ee3ea214bb7

SHA1: a53f243616cb35bfb5049d6e54ffdf62edb4c7a6

Uploaded At: October 19, 2021

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials