Villanova University is about to see an increase in applications in the near future. Did the education you can get there suddenly become better? Did the price of tuition drop? Do businesses want Villanova graduates more than graduates of other schools? Did people finally realize that Drexel is only a decent school for engineering?
None of these happened (although it would be great if the last one came true). What did happen, however, was that Villanova won the National Championship last night. This not only brings more attention to the school on across the country, but the simple fact that the school won also makes the school more attractive to prospective students.
Let’s assume that the win might be beneficial since it put the students and faculty in better moods or that it might not be beneficial since it causes everyone to be distracted. From an objective standpoint, the championship does not make the education any better or worse, but a pure cost versus quality comparison is not the only aspect of deciding which college to attend. Humans make decisions using subjective evaluations. In addition to tuition and quality of the education, people often put a lot of value on distance from home, weather, location, how many friends also attend, etc. But it is easy to see why each of these could add value for someone looking for a college.
It’s less obvious why championships attract students to schools. Maybe they want to be a part of a “winner,” but that doesn’t make the education better. It doesn’t matter much why this has an effect; it just matters that it does. It shows the impact of psychic utility in preference. For whatever reason, it makes them happy. It might not seem “rational” to you, but it makes sense to them.
This is called the “Flutie Effect” and it happens at schools that experience success in sports. This allows schools to accept better students and possibly more students, which is good for business.
The best way to explain ideas is through simple, relevant examples. This is especially true when the example is a current event. Most people love college basketball and March Madness, so it’s a great opportunity to explain some praxeology…and gloat about my alma mater.