In September 2023, David Leonhardt wrote an opinion piece provocatively headlined “Why Does Duke Have So Few Low-Income Students?" with images of graduation paraphernalia like mortar boards and diplomas covered in $100 bills. Based on the article’s analysis, Duke ranked 12th of the elite universities in the proportion of students with Pell Grants; Harvard ranked first, with Columbia, MIT and Yale closely behind. Though 12th in economic diversity, Leonhardt also notes that 40% of Duke’s students are students of color and 10% from overseas; this demographic puzzle of low economic diversity yet high racial, ethnic and global diversity is tucked into the context of Duke’s $12 billion endowment (ranked 13th of top 20 universities).
Leonhardt personalizes the piece featuring the stories of two students who reflect on introductions to luxury brands such as Canada Goose, luxury vacations in exotic places and the ease by which students impulsively enjoy trips to experience things like Mardi Gras in New Orleans. Merit scholarships are criticized for subsidizing high-income students. Sushi in Duke’s main dining hall is held up as an example of expensive guilty pleasures (versus sustenance). The article ends with an implicit and kind apology from Dean Gary Bennett, who, applying tools of economics, explains that Duke fell behind in a landscape of fierce competition with demand among post-secondary institutions that exceeded the supply of students with low income.
Duke makes for a powerful case study. Duke’s economic diversity looked similar to elite peer institutions a decade ago. Leonhardt moves his analysis forward, raising important normative questions such as: Are students worse off at Duke, with less economic diversity, than peer institutions? Does this affect their worldviews? Their role as citizens? Their obligation to society? And does it affect all of these things in ways that reinforce their privilege?
In a twist, at the end of Leonhardt’s piece, Duke students with low income express gratitude for their experiences and how they’ve widened their worldviews. I’d argue that this is the starting place for interrogating tough normative questions: what are the varied ways that students’ worldviews are and can be shaped on college campuses?
What better place to reflect on this than in a contemporary undergraduate economics classroom at Duke? A place that Duke students enter with very strong world views on, for example, income inequality (typically ranked as the top social problem in the U.S.) as undermining democracy.
Let me demonstrate by bringing you into my applied microeconomics classroom, taught in Duke’s Sanford School of Public Policy.
In my teaching module on economic consumer theory, we will turn to questions about housing and public education choices. Duke students have a lot to say about segregation and high housing prices. They also learn some things they didn’t have the tools to previously piece together.
For example, while it seems clear that when parents make decisions to enroll their children in private school because it presumably benefits their own children, students also learn that families are still paying for public education through taxes that they are obligated to pay no matter if they have children or whether or not their children attend the districted school. Students learn this and another important feature of public financing through this simple example: that most school districts realize their revenue from property taxes and property taxes are based on home values. This sparks a robust conversation about school quality and who benefits and who does not; students in my classroom who attended private school openly mingle their insights about their views and experiences of school quality with students who attended public school.
This sparks yet another thread about the value of homes that contribute to property taxes that fund school budgets that affect school quality. They learn that while the value of a home increases one’s assets (translated to an increase in your budget constraint), it can also price you out of your community if you are to realize that return and sell your home, which also might mean priced out of a high-quality school district. When home values go up, some things get better, e.g., increased revenue from property taxes can go toward funding public goods like schools, parks and libraries, but who benefits? Some people get priced out.
This sparks yet another kind of conversation in my economics classroom regarding segregation and discrimination. One year, a student vocally chimed in that prices are not always the objective determinant of value: this student’s mixed-race family staged their home (e.g., removing all photographs of her Black mother) to ensure its monetary value is not judged by racial bias.
I ask students to go online and calculate their eligibility for an earned income tax credit. Students punch in the most familiar number they have access to when asked about an annual salary: the annual tuition of a Duke education. They are shocked to realize that their earned income tax credit equals zero. How can it be that the cost of a Duke education does not reflect a salary eligible for a tax credit? This opens the door to a discovery of median household income in the U.S. and at levels of poverty, both of which are way below the cost of a Duke tuition.
Some of the deepest and sharpest insights happen at the end of the semester during students’ showcase presentations when students lean into applying economic concepts to make sense of their daily lives at Duke. This includes “the economics of luxury products,” almost always generating uncomfortable pauses and then lively debates about the economic mystery of how an unattractive $2000 sneaker could be so desirable. Students engage in collaborations reflecting wildly different backgrounds: a student from rural Japan working with a student from urban Los Angeles, and together they confront the trade-offs of traffic congestion, availability of public transportation and access to jobs and consumer goods, considering the impact on the climate, and on people’s quality of life.
Year to year students in my Duke economics classroom bring their existing world views, experiences and assumptions, and what I see is how these shape into new insights on the “exorbitant pricing strategies of Duke dining,” the “high cost of Duke parking” and the seemingly “rational decisions to participate in Duke Greek social life.” These are not comfort zone conversations, and these conversations are happening in ways that are applying core theorems of economics about the forces and dynamics of allocating scarce resources, equity and who benefits and who does not.
Going back to Leonhardt, can elite institutions like Duke do better on all aspects of diversity, including economic diversity? Yes, of course.
It’s important to recognize the ways in which we could do better, but also recognize the existing agency and diversity that we do have — and that can be leveraged to foster and facilitate democracy. Classrooms can be set with cultures in which students with low or high or mixed-income, indeed all students, are empowered to push world views. Classrooms — I might argue, especially economics classrooms — can go a long way to interrogate normative perspectives and issues from non-normative tools in all of the ways that a true democracy demands. That’s the good news!
Lisa Gennetian is the Pritzker Professor of Early Learning Policy Studies at the Sanford School of Public Policy. This piece is part of the “Virtues of Democracy” column, a series of op-eds by faculty and student contributors across Trinity College and the Sanford School of Public Policy. The column typically runs on Tuesdays or Thursdays.
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