Does Student Quality Fluctuate With Real Estate Prices?

Abstract

All university programs wish to admit high-caliber students because admission results may reflect the perceived quality of a program and have funding implications. However, the student intake quality of a program can fluctuate widely. This study investigates whether the fluctuation is caused by the volatile movement of the underlying industry that shapes the career prospects of a major. A real estate course in Hong Kong is used as a case study. Employing 20-year time series data, the findings reveal that the intake quality was strongly positively correlated with the performance of the real estate market. The presence of negative autocorrelation was indicative of students' risk-averse selection strategy. These results highlight the difficulties in real estate curriculum design (e.g., learning methods and coverage) to suit different cohorts of student quality. Borrowing from portfolio theory, an implication to educators is that diversification through admitting non-local students (from places with low correlations with the local property market) can reduce the volatility in student quality.