Consumer Behavior: The Case of Higher Education
Economists distinguish between consumption goods and investment goods. A lay definition of a consumption good is a good that is "used up" when it has been consumed -- the hamburger we buy and eat at McDonald's; the gas we put in our car. When it's gone, it's gone.
In contrast, an investment good is a good that we consume and derive "utility" from on multiple occasions over time; i.e., our home, our automobiles, even the latest laptop or iPhone -- we purchase the good today but it has a useful life of a few or even many years.
Education, and specifically higher education, has characteristics of being a consumption good and an investment good. When I decide to attend the local university, I am purchasing an investment good -- I am spending a lot of money. The education I receive over time will pay dividends and provide financial benefits to me for many years into the future.
At the same time, while we are purchasing higher education, there are consumption "benefits" that accrue to us -- the joy of an outstanding lecture, the thrill of watching our basketball team beat our archrival, a night of partying after a mid- term exam, the individual we meet who later becomes our spouse, providing us years and years of happiness.