60 Appendix 3: Glossary of terms Appendices Appendix 3: Glossary of terms Alternative education: A “with” and “without” measure of the percent of students who would still be able to avail themselves of education if the university under analysis did not exist. An estimate of 10%, for example, means that 10% of students do not depend directly on the existence of the university in order to obtain their education. Asset value: Capitalized value of a stream of future returns. Asset value measures what someone would have to pay today for an instrument that provides the same stream of future revenues. Attrition rate: Rate at which students leave the workforce due to out-migration, unemployment, retirement, or death. Benefit-to-cost ratio: Present value of benefits divided by present value of costs. If the benefit-to-cost ratio is greater than 1, then benefits exceed costs, and the investment is feasible. Counterfactual scenario: What would have happened if a given event had not occurred. In the case of this economic impact study, the counterfactual scenario is a scenario where the program did not exist. Credit hour equivalent: Credit hour equivalent, or CHE, is defined as 15 contact hours of education if on a semester system, and 10 contact hours if on a quarter system. In general, it requires 450 contact hours to complete one full-time equivalent, or FTE. Demand: Relationship between the market price of education and the volume of education demanded (expressed in terms of enrollment). The law of the downwardsloping demand curve is related to the fact that enrollment increases only if the price (tuition and fees) is lowered, or conversely, enrollment decreases if price increases. Discounting: Expressing future revenues and costs in present value terms. Earnings (labor income): Income that is received as a result of labor; i.e., wages. Economics: Study of the allocation of scarce resources among alternative and competing ends. Economics is not normative (what ought to be done), but positive (describes what is, or how people are likely to behave in response to economic changes).
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