Sunday, January 24, 2010

States Need To Rethink How They Allocate Their Scarce Resources

When state universities run out of money to fund classes to meet the needs and interests of all their students, they need to change the way they choose who benefits and gets into the classes they want and who does not. Other state agencies that provide non-life saving programs also need to change allocation methods of their programs to their constituencies.

For example, in The New York Times article, "Students Face a Class Struggle at State Colleges" by Katherine Mieszkowski on January 23, 2010, California University students are assigned a time to register for the remaining open classes. No preference is given to a student who values an open course more highly than another student with an earlier registration time. The later registering student may out of interest or requirement place a greater value on a particular course that an earlier registering student who would be equally satisfied and happy to take a different course.

One way to have a fairer course registration would be to use an auction (or trading) process for student registrations instead of the typical time slot method. Students could be given a fixed amount of play money that they could use to bid (or buy) for an open seat in a course. At the end of the bidding (or trading) process, open seats that are left over and available could be assigned on a first come first serve basis (or some other standardized method, such as randomized alphabet of first letter, and if needed second, then third, etc of last name, or other equally fair method), to students who still need more course credit that term. After all students register, a day of trading could be allowed for students, who desire, to improve their valuation of their semester courses.

The point is that there are many auction and market experts available who could help universities and government agencies designed fairer methods to allocate course and non-life essential programs. At universities, it would be fairer in the sense that those students who place a higher value on a course than other students will get a greater chance of successfully registering for that course than the students who care less about that course. Time slot registration does not consider the educational worth of the course to the student.

Allocation methods based on a program's recipient's self-valuation of that benefit versus another benefit from the same program would be fairer to constituencies in these times of severe state budgetary constraints. Recipients given a play money amount to buy or bid for their choices of the benefits of a program would feel like they got their monies worth because they will have outbid other potential recipients and spent all their budget.

See my previous post on this topic, "What If Colleges Auctioned Classes?"

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