>In exchange for their capital, the investors would receive a fraction of a student’s future income — or, even better, a fraction of the increase in her income

>In exchange for their capital, the investors would receive a fraction of a student’s future income — or, even better, a fraction of the increase in her income that derives from college attendance. (This increase can be easily calculated as the difference between the actual income and the average income of high school graduates in the same area.) Not so fast. This doesn't show that the college improved the person's income at all. Colleges don't admit students randomly. It's just as possible for grads to have higher earnings simply because they were identified and selected as future successes as it is that the college made them successes. A better, but still imperfect solution would be to compare the graduates earnings with those who were admitted but chose not to go.