Does Technology Lower the Cost of Education without Reducing Quality? A Financial Modeling Approach to Flipping the Classroom

Abstract

Colleges and universities are rapidly expanding their use of technology, often with the goal lowering costs while improving educational quality (i.e., student learning outcomes). Yet, there is little reason to expect technology will reduce costs if it is not used to transform the content covered during a traditional course’s class time into asynchronous materials, such as recorded videos the students access online in a so-called flipped course. Although there is evidence that flipped courses can match the quality of traditional courses, the question of whether flipped courses reduce costs remains unanswered. I address this gap in the literature by developing a model that compares the cost of a flipped course to its traditional version. With this model and a database of 2,060 students enrolled in seven cohorts over a six-year period, I find consistent evidence of a significant decrease (36% on average) in the cost of developing and delivering a flipped course relative to its traditional version without a decrease in quality. I also show the circumstances where a flipped course can be more expensive than its traditional version, and discuss how the model can be a practical tool for deciding when it makes sense to invest in technology.

Keywords: EdTech, Flipped Classroom, Financial Modeling

JEL Classification: A00, A20, G00, G31,