Measuring Value Added in Higher Education: A Proposed Methodology for Developing a Performance Indicator Based on the Economic Value Added to Graduates

The 2003 UK higher education White Paper suggested that the sector needed to re-examine the potential of the value added concept. This paper describes a possible methodology for developing a performance indicator based on the economic value added to graduates. The paper examines how an entry-quality-adjusted measure of a graduate's 'expected' degree class might be derived, and also how the wage differentials associated with different degree classes could be used to quantify the relative values of degrees. These two measures are then used to develop a proposed performance indicator based on Graduate Relative Economic Value Added.