Friday, July 1, 2011

Which investments pay the most?

From David Leonhardt, via Greg Mankiw:
The Hamilton Project, a research group in Washington, has just finished a comparison of college with other investments. It found that college tuition in recent decades has delivered an inflation-adjusted annual return of more than 15 percent. For stocks, the historical return is 7 percent. For real estate, it’s less than 1 percent.

1 comment:

  1. That data is Enron level cooked. 15% return on college tuition? Without considering opportunity cost of attending college when you could be working? Without considering the interest if loans were necessary? 

    Also, I can get a job making 8 dollars an hour with 0 eduction cost. That is an infinite return on investment. Therefore Return On Investment is a poor metric for illustrating any conclusion.