The Returns and the Price of Higher Education in Turkey: A Case Study of Faculty of Medicine

In most countries, the fact that higher education expenses are covered by public resources decrease the private costs due to the reasons such as equal opportunity, imperfect market, external factors, protection of minors, search for common values, the effects of education on economic growth and semi-public property of higher education. The fact that higher education expenditures are covered by public resources and the fact that investments on education provide important benefits for both public and individuals increase the demand of higher education. These benefits are among the most important factors that influence the investment decision of individuals. The decision of investment depends on the possible income in the future, the cost of investment, and the current interest rates. Higher education with investment purposes is influenced by these three mutual factors. The purpose of this paper is to calculate the rates of returns and prices for the faculties of medicine in Turkey. The data for both social and private benefits and costs was obtained using the cost-benefit analysis method. By means of the data obtained, both private and social return rates were calculated using the internal return rate technique. The price of higher education was obtained through the private return rate and current interest rate. In the conclusion section, it was pointed out that the private return rates at higher education level are significantly higher than the social return rates causing decreased price and increased individual demand.