Information in the market for human capital like education is crucial as it is vital for the deve... more Information in the market for human capital like education is crucial as it is vital for the development of any country. This paper empirically examines the extent of information asymmetry in the contracts in the Indian higher education market between the higher education institutions (HEIs, the contractors) and the students (the contractees) based on the information disseminated on the quality of the education provided. The study is specific to Masters in Business Administration (MBA) programmes in Tamil Nadu, a state in India where private MBA colleges have mushroomed. The study also examines the causes and consequences of the observed asymmetry. This study is the first of its kind, both in terms of the method used to measure information asymmetry as well as the market in which the concept is applied. The study measures information asymmetry involving 90 contracts based on primary data collected through structured interview from 138 respondents (90 contractees and 48 contractors) involved in the contracting. A novel method is used to measure the information asymmetry; additionally, appropriate statistics like averages, percentages, scatter plots and trend analysis have been used to draw inferences. The findings showed that over 50 per cent are bad contracts (lemons) as they have displayed high information asymmetry. Primary reason for the observed asymmetry is the opportunism by the contractors incentivised by shortsighted public policies. Hence, the study calls for better public policies in the Indian higher education market and for further research in this direction.
Information in the market for human capital like education is crucial as it is vital for the deve... more Information in the market for human capital like education is crucial as it is vital for the development of any country. This paper empirically examines the extent of information asymmetry in the contracts in the Indian higher education market between the higher education institutions (HEIs, the contractors) and the students (the contractees) based on the information disseminated on the quality of the education provided. The study is specific to Masters in Business Administration (MBA) programmes in Tamil Nadu, a state in India where private MBA colleges have mushroomed. The study also examines the causes and consequences of the observed asymmetry. This study is the first of its kind, both in terms of the method used to measure information asymmetry as well as the market in which the concept is applied. The study measures information asymmetry involving 90 contracts based on primary data collected through structured interview from 138 respondents (90 contractees and 48 contractors) involved in the contracting. A novel method is used to measure the information asymmetry; additionally, appropriate statistics like averages, percentages, scatter plots and trend analysis have been used to draw inferences. The findings showed that over 50 per cent are bad contracts (lemons) as they have displayed high information asymmetry. Primary reason for the observed asymmetry is the opportunism by the contractors incentivised by shortsighted public policies. Hence, the study calls for better public policies in the Indian higher education market and for further research in this direction.
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Papers by Maneesha N S