05/04/2013 02:04 pm ET Updated Jul 04, 2013

What's a MOOC Worth?

While I hadn't planned on writing about a single theme over at the Degree of Freedom site this week, it turns out that one developed anyway on the subject of what a MOOC is worth.

This began from an analysis of property rights derived from a MOOC class I just completed on Property and Liability in which I tried to see if some of the rules taught in that class (that potentially infinite property rights can apply to a single object, that -- in a perfectly efficient market -- property rights will gravitate to their highest valuing owner, etc.).

If we consider college, or at least the fraction of college that corresponds to a single credit-bearing course, then we can do some experimental math which will confront us with questions regarding what we're actually paying for when we pay for education.

For example, if a college charges $16,000 annual tuition and requires students to take eight course per year, that translates to each course (which, for the sake of this conversation we will define as one college credit) as having a value of $2,000.

With that number in mind, we should ask ourselves what people think they are getting when they pay this price. Two possible answers include:

• The learning received by taking the course
• One increment towards a degree (with a degree being defined as the right to legitimately claim to have completed a course of study at the institution providing the degree, a right which supposedly provides financial and other benefits after college)

Now it's possible (even likely) that this two grand is paying for both things. But what value do we place on each part?

There is some data out there we can use as a starting point to answer that question. For example, previous to the current explosion in MOOCs, another attempt to bring Ivy League learning to the masses (an initiative called AllLearn -- which included Yale and Oxford Universities) fell apart partly because there didn't seem to be enough people willing to pay the fees the company was charging (all a fraction of what those same courses would cost if taken at Yale or Oxford).

Another source of insight might be a service like The Teaching Company which charges approximately $100-$300 list for their non-credit-bearing, college-level recorded lectures in various formats, pegging the price for pure learning in the low three figures. But if you look at their prevalent sale prices of under $100, this would indicate a more natural price for their courses well below list. And if we were doing a more systematic economic analysis, it would be worth discovering how many of their "customers" (like me) will only take Great Courses classes they can obtain for free at the public library.

So if people are willing to pay $2,000 or more per credit when a course is taken within a degree-granting institution, but less than 5 percent of that for the same course stands alone, that's a pretty strong indication of where the value in the college course truly lies.

As you ponder that for a moment, also consider the fact that this apparent aversion to pay for learning does not seem to apply to all disciplines. For instance, I currently pay $30 per month to subscribe to Lynda.COM, a service that provides video tutorials on a wide range of technological products (including all of the software used to power my various online education projects). And I don't think it means nothing that on the open learning site, fewer than 1,000 people have been willing to shell out $10 to learn Greek history, while close to 35,000 have paid $99 to learn Excel.

Perhaps this is telling us that while many of us are happy to take advantage of free high-quality learning resources to advance ourselves intellectually, we are only ready to pay for learning if we can see a direct financial or professional benefit in doing so.

Adding into this set of peculiar observations is the fact that someone might commit dozens or even hundreds of hours into completing a MOOC class -- time which translates into a pretty high dollar figure, even if we use a low conversion factor (like minimum wage) to convert hours into dollars. And yet this same person might balk at spending $20 to enroll in the class.

It's possible that a culture of open education has created the expectation that pure learning should be free (with creates an associated hostility to paying for it). Or perhaps we are willing to do certain things with our money (like advance our careers) but are ready to make other investments with our time (like improving our mind).