An Economic Analysis Of Chinese Family Investment On Higher Education

Basing on Human Capital Theory, this article puts forward the concept of the Family Investment on Higher Education (FIHE). According to the formation, status and development of the Cost-Recovery policy of China's higher education, the article brings forward the FIHE market model, then gives an analysis of its behavior subject, market construction, and operational mechanism in FIHE market. In the light of economic theory, the analysis goes deeply and systematically into two fundamental elements of FIHE and other influencing factors. In order to give the guidance to family investment on higher education and promote the development of China's higher education, we put forth a scries of constructive suggestions.FIHE is a higher level of human capital investment. In it families play a major role of behavior subject, and invest a certain sum of capital on higher education, thus form a special human capital quantity and quality, and optnni/.e the human capital structure, so as to acquire more future earnings.With the formation and development of Cost-Recovery policy of China's higher education, the rudimentary of higher education investing market comes into being. Each behavior-subject interacts with each other and undergoes constantly in the market, and equilibrates through price, competition and exchange. The FIHE market includes capital market, higher education market and personnel market.In the investment market, it needs two fundamental terms when the family investment behaviors take place. The terms are Investment Attitude (IA) and Investment Finance (IF). The IA is the subjective term, it shows the level of IA, and the IF is the objective and material term, it shows the possibility of family investment.Family Investment Altitude (IA) is psychological motivation that the necessity on family-investing behavior on higher education, while the effectiveness of a potential demand to invest on higher education turns on prospective potency of family. The Investment Attitude depends mainly on the anticipation of educatee's Capable Aptitude (CA), Earnings (E), investment risk (IR), and other latent factors (L). Educatee's CA is the premise that brings about family investment on higher education. The Family Investment Attitude is in direct proportion to educatee's CA and E, but in inverse proportion to IR. Theory group should strengthen study in family investment behavior on China's higher education, in order to form effective family investment attitude and reasonable quality of the Investment Attitude.Tfee Total Cost (TC) on higher education investment and the Total Fund (TF) raised by family are the two most important factors to decide family investing actuary whether take place. It's a rigidconstraint to investment behavior. (The constraint of the TC originates from the investing project itself, and the constraint of the TF emanates from family interior.) The Investment Finance (IF) has positive correlation with the TF, but negative correlation with the investment TC. When the family TF overpasses the investment TC, family would have more possibility to invest in higher education. Family need engage in controlling cost and improving fund, doing so to improve the IF. Government should strive to develop economy and enhance the TF of family. At the same time government should control the cost shared by family on FIHE, so as to enhance the possibility of family investment. Government should strive to develop economic and then to strengthen family raising-money capability. As well as it should control investment cost of higher education, in order to upraise the possibility of FIHE.With a certain IA and IF, the family investment conducts on higher education must take place. The conduct formula is influenced jointly by IA and IF. The outcome of the influences by IA and IF is the effective demand in the market. In order to improve the effectiveness of the conduct, family should have operational ability, and make effective decisions in managing the investment. In the higher education investment, according to acc...