Private School: Investment or Consumable?

Megan McArdle, economics writer at The Atlantic, makes a provocative point about the hosuing market during a December 30, 2010, Marketplace segment on NPR.  In contrast to several decades of conventional wisdom that buying a house is an investment (because housing prices tended until recently to always go up), McArdle argues that a house purchase today is more prudently thought of a consumable; in other words, one consumes housing in much the same way as one consumes automobiles or groceries.

This notion, if even partially true, profoundly threatens much of our economic model.  When housing is a consumable, it would reasonably follow that far fewer people will make the purchase, especially if it requires high levels of indebtedness.  It also prompted me to think about how we position private elementary and secondary schooling in the education marketplace. Higher education is clearly pitched (and popularly conceptualized) as an investment, whereas private elementary and secondary schooling is more closely aligned with consumption (and, therefore in today's economy, with declining levels of disposable income).  

What data would we need to recast private school as an investment?  One piece would be to demonstrate, quantifiably, the value added versus the alternative.  Universities excel at this and, frankly, we don't.