Where to find: Avg. Home/Car prices and Avg. starting salaries, over time...

January 4, 2007 4:45 PM

Economists/Statisticians: For which years was: ([Median New Home Price] + [Median New Car Price]) / (Average Starting Salary for a College Graduate) The best and worst setup for the person mentioned?

This occured to me (in the middle of a moment of inter-generational antagonism) as a very rough, inelegant, back-of-the-napkin way to illustrate the decline in value of a college degree.

I am not an economist or a statistician and I am absolutely convinced that there are thousands of better ways to illustrate this. Feel free to point these out to me, I am very interested how a professional would set this up. But please also point me to where I would find these sets of data that I requested in the original.

Maybe a pro would add health care costs? energy costs? gallon of milk? I don't know... but it seemed to me that for most of the US, home/car ownership is the gatekeeper/benchmark to the "middle class" and that those two things probably also contribute more than anything else to the debt load of this person.

Oh, I don't really require hand-holding, past finding where the data lives... I can throw it into a spreadsheet, myself. I guess what I'm looking for would be just a year-by-year "median new home", "median new car," and "average starting salary".

Many thanks.

posted by cadastral to education (18 comments total)

I don't have a direct answer to your question, however:

This occured to me (in the middle of a moment of inter-generational antagonism) as a very rough, inelegant, back-of-the-napkin way to illustrate the decline in value of a college degree.

You are operating under a terrible assumption that starting salary of a college education is somehow an accurate valuation of said degree, which is completely incorrect. I cannot count the number of ways a college degree enhances one's life (and there are a ton, including cash, respect, additional job opportunities, further education, to name a few) but starting salary is just that: a place where the degree's value begins to show. By no means is the starting salary indicative of anything except the demand for fresh graduates in any given industry.
posted by SeizeTheDay at 5:08 PM on January 4, 2007

I would start with Ford and GM's Annual Reports. The SEC's EDGAR database has results (form 10-k) back to 1994.

Regarding SeizeTheDay's comment, you just need to change your thesis from "the value of a college education" to "the monetary value of a college education."
posted by b1tr0t at 5:11 PM on January 4, 2007

I disagree b1tr0t. First of all, the starting salary of any industry is not indicative of the median (obviously), which would be a much better monetary indicator of a college education, but second, and more important, I think the ultimate goal of this exercise is to show declining value of a college education (which I understand) but it fails to do that because said education opens the door to graduate programs (which are increasingly necessary for lucrative positions in today's global job market) and various entry-level positions that now require an undergrad.
posted by SeizeTheDay at 5:18 PM on January 4, 2007

You are operating under a terrible assumption that starting salary of a college education is somehow an accurate valuation of said degree

Granted. Poorly worded on my part.

Reword:
Looking for ways to illustrate the decline in pecuniary compensation for a college degree.
posted by cadastral at 5:19 PM on January 4, 2007

I think there are a couple of fatal flaws in your question. First, a college degree in what?

It's painfully obvious that some degrees are worth more than others. A degree in computer engineering is worth a great deal right now. A degree in postmodernist literary theory qualifies you to wait tables.

Second, a college degree from where? There was a time when a college degree from an Ivy League university was a lifetime ticket to great things, but it's not clear that's true any longer. On the other hand, a degree in engineering from MIT or CalTech is worth a hell of a lot.

The category you're asking your question about, the collective body of all degrees granted by all universities, is so varied as to make any generalizations about it meaningless.
posted by Steven C. Den Beste at 5:30 PM on January 4, 2007

Duder: Looking for average starting salary for a college graduate. All of them. All people desigining hose attachments for NASA and all people working as a barrista while pondering modes of alienation. I think the breadth of the sample will make things sort out in a satisfactory way.
posted by cadastral at 5:35 PM on January 4, 2007

I think you need to refine your question - at the moment you're not comparing like with like.

Having graduated from college in '50s would put you in the top 10-20% of your generation (where 'top' is some combination of social status and academic ability). Now, since 40-50%* of young people are in tertiary education, of course the monetary advantage of college is necessarily diminished.

But in the same way, secondary education gave you a huge advantage in the nineteenth century - does the fact that everyone is now entitled to secondary education mean its value has 'declined' in any meaningful way? Surely not.

I bet if you looked at two comparable things - e.g. Harvard grads of 1950 and 2006 - you would find the monetary advantages would not have changed all that much.

* True in the UK; can't be far wrong for the US.
posted by matthewr at 5:37 PM on January 4, 2007

If you're trying to decide if a college education now is worth more or less than in the past, theres a different factor that has to come into play. You're trying to evaluate it as an investment. More or less, if you took the price of a college education, would you net more by spending it at a college, or by investing it in T-bills?

Thus another factor that has to come into play is how much it costs. The cost of a college education has been rising faster than the rate of inflation for the last 40 years.

And you also have another heterogeneity problem, because of the wide variation in expense from school to school.
posted by Steven C. Den Beste at 5:38 PM on January 4, 2007

I think the breadth of the sample will make things sort out in a satisfactory way.

Not necessarily. The problem is that the overall average might change because the mix has changed. The value of an engineering degree could have risen, but if the ratio of Lit degrees to Engineering degrees increased, the average could still go down.

So an overall average might be an interesting factoid, but it would provide little or no guidance for a specific young person and his parents trying to decide if college is worthwhile. Even if the average declined, the particular degree that particular young person might earn could well be much more valuable than average -- or much less valuable.
posted by Steven C. Den Beste at 5:40 PM on January 4, 2007

Here is the median house price for the last 40 years. I believe this includes existing and new homes. The link cites the US census (but I did not take the time to double check the numbers).
posted by SeizeTheDay at 5:41 PM on January 4, 2007

Another problem with an "average" is that these things aren't on a Gaussian distribution. A mean, in particular, is almost certainly going to be extremely deceptive. Categorization into quintiles would be much more informative.
posted by Steven C. Den Beste at 5:44 PM on January 4, 2007

Here are the median wages of high school/some college/undergrad and higher from the US Dept. of Educ. from 1980 til now.
posted by SeizeTheDay at 5:49 PM on January 4, 2007

Are the median house prices SeizeTheDay linked to real or nominal? I'm guessing nominal, which means you'll have to deflate them with your preferred measure of inflation (CPI, probably) to make them mean anything.
posted by matthewr at 6:14 PM on January 4, 2007

Can you put a link up to the results of this when you are done? It's an interesting question.
posted by sien at 6:49 PM on January 4, 2007

Some price data that might be of use for cars is the inthe70s/80s/90s site.

The 70s prices are here
posted by sien at 6:59 PM on January 4, 2007

The median house in the 1950s was not nearly as large or as well equipped as today. Same with cars.
posted by jjj606 at 4:56 AM on January 5, 2007

The median house in the 1950s was not nearly as large or as well equipped as today. Same with cars.

but these are not determined by the said college graduate, are they? it's determined by the "market," or Ford motor company, etc.
posted by eustatic at 7:26 AM on January 5, 2007

Well, jjj606 is still correct. You get a lot more car or house today than people did 50 (or even 20) years ago. It's hard to quantify this difference, but it's certainly there.
posted by zpousman at 12:22 PM on January 5, 2007