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Economics of Distance and Online Learning

reviewed by Greville Rumble - June 30, 2008

coverTitle: Economics of Distance and Online Learning
Author(s): William J. Bramble and Santosh Panda
Publisher: Routledge, New York
ISBN: 0415963893, Pages: 296, Year: 2008
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My headline judgements on this book read as follows:

This book is well worth reading.

The title is somewhat misleading: Some of the chapters (notably chapters 2-5 and 12) deal with economic and cost issues only cursorily, if at all. They focus instead on structures.

There are two outstandingly good chapters in the book.

There are no really weak chapters.

The book brings together US (Chapters 4-6 and 12) and international experience.

The concluding chapter rather states the obvious.

Because it is a multi-authored volume, there is some repetition.

Because it is a multi-authored volume, there is no overall coherent framework – but this has some value because in reality we all have to grapple with a variety of frameworks.

The editors have persuaded some well-known names in the field of distance and online learning to contribute to this book, and the 19 authors bring a wealth of experience that makes the book well worth reading.

The book opens with a brief chapter from the editors that sets the scene. Thereafter – with the exception of the concluding chapter, which is again by the editors—there are three main concerns driving the authors, although these are not delineated clearly by editing.

The first concern is with structure. Here chapters 2, 4 and 5, 12, and some of 3, 8 and 13, are important. Thus Randy Garrison and Heather Kanuka (Chapter 2) contrast the industrialized (Fordist) nature of mass-media based distance education with the newer web-based systems before going on to talk about the convergence that has taken place between distance education and class-based teaching, leading to the emergence of blended learning models. They point to the management of change issues that arise. Chris Curran (Chapter 3) examines online education and its implications for stakeholders and managerial functions. Thomas Clark (Chapter 4) looks at various arrangements (structural and funding) governing the provision of virtual schooling and adult basic education in the US, and makes a number of interesting points about the way in which federal and state policy has affected provision. Paul Edelson and Von Pittman (Chapter 5) provide an historical analysis of the development of distance learning in the US. In Chapter 8 Alistair Inglis revisits some familiar territory (single-mode, dual-mode, consortia, and industrial training structures; mass-media vs. online learning), and makes many sound points regarding the influence of these factors on costs and quality, without providing much hard evidence. Chapter 12 by Jade Nguyen Strattner and Diana Oblinger, drawing on US experience, discusses the transformation of workplace learning through embedded learning. Finally, in Chapter 13 Palitha Edirisingha discusses in some detail the ways in which one might make sense of the open basic education sector.

In Chapter 5 Edelson and Pittman address some important misconceptions about e-learning (no, it will not totally replace traditional education; no, we don’t know whether e-learning will improve the quality of what we do because the jury is still out; no, just because it exists, one can’t sit back expecting e-learning to address all the social injustices that there are in this world, etc.). The issue of quality alone is very complex and would warrant a book in itself, and so while not necessarily disagreeing with their judgment, I would not want anyone to take it at face value. They also make some interesting forecasts about what will happen in the future. One of these is that “E-learning will make ‘scientific learning,’ which stresses maximum efficiency, an important goal” (p. 85). I longed to know what the authors had in mind here when they said, “All concerned will devote more attention to the ‘science’ of teaching and learning.” Thinking back, from a climate informed by a constructivist model of learning, to the programmed learning of the behaviourist approach to distance “education,” I wondered what Edelson and Pittman meant.

The second concern is with funding. Here Chapters 6 (by Mark Smith and William Bramble) and Chapter 7 (by Santosh Panda and Ashok Gaba) (but also part of Chapter 4) analyze the funding of distance and online learning in the US (Chapters 4 and 6) and India (Chapter 7). That the funding of distance and e-learning is problematic because traditional class-based funding requirements do not fit with the need of the former comes as no surprise. Indeed, from what Smith and Bramble say, it looks as if funding bodies have learned little in the last 40 years.

In respect to Chapter 7, I have a word of warning: Panda and Gaba discuss, for comparative purpose, the funding of the Hong Kong, Thai and UK open universities.  At least with regard to the UK Open University, their account (pp. 111-2) is poor. The UKOU was initially funded directly by government, in recognition that its financial needs differed significantly from those of other campus-based universities. In its first few years there was an ‘open check book’ because no one knew what it would cost, but with costs mounting, a formula-funding approach was adopted from 1974 which funded the University for teaching only (although in practice the cost of the time full-time staff were given for research was also met). The formula was based on three elements: student numbers, course numbers, and overhead. Government control over costs was exercised by controlling student and course numbers and overhead growth. Later on, the University’s funding authority was changed and it came under the body responsible for all UK public sector university funding. Funding was then driven by student numbers in each of a number of subject areas. At the same time the University opened up new self-financing areas (e.g. management education, and the teaching of students resident outside the UK). In short, the twists and turns of the UKOU funding game were more complex than the simplified and rather garbled account presented by Panda and Gaba.

The third thrust is the focus on economics (Chapters 9-11 and 14, some of Curran’s Chapter 3, Inglis’s Chapter 8, and part of Chapter 12). In Chapter 12 Edirisingha discusses the costs and benefits of open basic education and provides some evidence of hard outcomes on costs and outputs (where the evidence is largely positive). Insung Jung (Chapter 9) is sound on the costing of virtual university education; while she provides little hard evidence, those who follow her references will be able to access much of the key literature up to roughly mid-2006. That leaves me with the three chapters that really make this book.

Zane Berge and Charlotte Donaldson (Chapter 11) deal with the cost-benefits of online learning. Cost Benefit Analysis (CBA) is not easy – not least because it is difficult to put a monetary value of some of the benefits of education and training (e.g. enjoyment, self-confidence, mastering the art of learning). Berge and Donaldson focus their attention on Return on Investment (ROI) analysis but quite rightly make the point that as an approach it has some significant drawbacks. So, while I agree with them about the utility of trying to measure cost benefits, I am sorry that they did not look at alternative approaches, and in particular the Residual Income (RI) – later termed Economic Value Added (EVA) – approach. RI/EVA is not problem-free; there are particular drawbacks during and immediately after a period of inflationary cost increases. However, when applied to the costs of distance education/online learning in ways that define capital costs in terms that embrace expenditure on those preparing course materials and management systems that are planned to have a useful life of more than one year, it provides an approach that can help managers look at the cost and income streams of courses and programmes, and help them come to decisions on which ones to invest in, and which to avoid.

If I have reservations about Berge and Donaldson’s Chapter at a technical level, I have none about the last two. Drop-out has been a problem for distance education for years, so it makes sense, as Ormond Simpson argues in his excellent chapter on the “Cost-benefit of student retention policies and practices” (Chapter 10) to try to reduce it. Simpson writes well and explains concepts clearly and precisely; he introduces some interesting new concepts (the ‘resale value’ of qualifications; the ‘willing to pay’ concept), and he provides a concrete example of why, financially, it is worthwhile trying to reduce drop-out. This is an outstandingly good chapter.

Finally, in Chapter 14 (“From Baobab to Bonsai: Revisiting Methodological Issues in the Costs and Economics of Distance Education and Distributed Learning”), Thomas Hülsmann provides an outstanding exposition of why the cost structures of mass media distance education on the one hand (the ‘baobob’ of the title), and of distributed learning on the other (the potential “bonzai”) function as they do, and of the implications of their differences for educational planners and managers. This is a brilliant chapter. Do not be put off by the cost equations Hülsmann brings into the chapter: you can skip them and get all that matters from the text. On the other hand, they are there if you need them.

Cite This Article as: Teachers College Record, Date Published: June 30, 2008
https://www.tcrecord.org ID Number: 15297, Date Accessed: 5/24/2022 6:44:33 PM

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About the Author
  • Greville Rumble

    E-mail Author
    • GREVILLE RUMBLE is an independent consultant in the planning, management and costs of distance education. Greville Rumble joined the Open University in the UK as an administrator in 1970 and in career ending in 2002 held a number of posts. He was the University’s corporate planner for two very different periods in the University’s development, in the 1970s and 1980s; in the 1990s he was director in two of the University’s regions, responsible for the delivery of academic and support services to students; and in 1998 he was appointed to a personal chair as Professor of Distance Education Management. A programme-project staff member of the University’s international consultancy services in the late 1970s, he established himself as a consultant in the planning, management, and costs of distance education. To date he has worked professionally in over 50 countries – in the 1970s focusing primarily on developments in Latin America, including a year in the Planning Vicerectorate of the Universidad Estatal a Distancia in Costa Rica; in the 1980s, largely in India and Bangladesh; and most recently, in Africa. He has written widely on the planning, management and costs of distance education at higher and more recently at secondary education (Open Schools) levels.
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