It’s a common rant when you catch up with your hometown friends:

“I’m studying in XYZ city,” they say… only to admit that they’re living on the outskirts, far from the action.

Is it just a coincidence that most universities are located on the outskirts—or is there something more to it?

Ever wondered about the economics behind it? Neither did I—until now.

Let’s dive into it then, shall we?

The Economics of Location: Why are outskirts preferred ?

The first and most obvious reason is land availability—it’s cheaper to acquire large parcels of land at the outskirts. It has somehow become a matter of prestige nowadays to have a larger campus with facilities available inside the campus itself but let’s not forget the cost of it in the middle of the city.

It is linked to the  basic economic principle — the scarcity of resources and unlimited wants. It isn’t economical to have large campuses in the middle of the city where you generally have residences, commercial buildings, city centres etc.
 Locating the campus at the outskirts not only reduces fixed costs but also helps achieve economies of scale over a period of time in infrastructure. Once you’re able to accommodate more students, the average cost per student automatically goes down.

The Nudge Effect: Encouraging Focus Through Isolation

But isn’t that the ideal situation for students?

Away from the hustle and bustle, fewer temptations to roam the city, and a focused environment that encourages academic productivity. Universities, intentionally or not, create a kind of nudge—where students’ best options become social interactions, research and campus life, rather than constantly venturing into the city.

Behavioral Impacts: Does Location Impact Students?

With this comes the question of whether it’s truly what a student wants? Is it going to impact his behavior negatively or positively?

According to a research conducted at a Chinese university titled “The Varied Restorative Values of Campus Landscapes to Students’ Well-Being”, landscapes are an integral part of university campus designs. The natural features incorporated into university campuses create opportunities for students to engage with their surroundings and each other in open, inviting spaces, enhancing their overall experience.

Researchers have observed that campus landscapes have positive restorative effects, contributing to students’ mental well-being. Restorative effects denote positive changes in psychological states, of which perceived stress and happiness are two fundamental elements.

This evidently suggests that campuses amidst nature and away from cities have had positive effects on students’ focus, wellbeing and intuitive values.

Micro Economies and Externalities: Growth Beyond the Campus

In the growing age of technology and AI, in-person discussions, debates, and collaborative idea development often take a backseat. But by studying human behavior and noticing their habits and patterns, one can analyze what prompts students to indulge in meaningful conversations with each other and get into the sentiment of  campus culture.

According to a study on student practices, students’ have no fear of technology or interacting with people they have never met face to face but they still prefer group interactions and learning by doing.

Interactive spaces—classrooms, lecture halls, open garden spaces , cafeterias—within the campus make students feel more comfortable in forming or re-forming groups to share their experiences, opinions and interests . 

These microeconomies created within campuses not only benefit students but also generate positive externalities. When a university starts to flourish, nearby paying guesthouses , general stores , cafes, housing apartments , etc. experience a boom leading to development of the area and flourishing the local economy.  

The Best of Both Worlds? A Balanced Perspective

Jason Patel, founder of Transizion, describes these college campuses as offering the “Best of Both Worlds.” Students have the flexibility to venture into nearby cities for new experiences or remain within the vibrant campus community. Many choose to do both, enjoying a mix of campus life and off-campus adventures. You get to enjoy the benefits of the city you’re living in but without being in the middle of it.

Conclusion: Witty or Shifty?

So, is having a campus on the outskirts— witty or …shifty?

Definitely a smart play from an economic standpoint—lower distractions, reduced land costs and building self-sufficient communities to enhance learning experiences.

There’s always an opportunity cost—for students and institutions alike. Students may sacrifice urban conveniences, while universities may trade prestige for space and focus. But in return, they gain an environment optimized for learning and community-building and for many—that’s worth it.

As technology advances and hybrid learning grows, it will be interesting to see how location continues to shape student experiences and university strategies.

References

Gubbels, J. S., et al. (2024). Which landscape site on campus is best for students’ well-being? BMC Public Health https://bmcpublichealth.biomedcentral.com/articles/10.1186/s12889-024-17952-w

Oblinger, Diana G. (2006). Chapter 5: Student Practices and Their Impact on Learning Spaces. In D.G. Oblinger (Ed.), Learning Spaces. EDUCAUSE. https://www.educause.edu/research-and-publications/books/learning-spaces/chapter-5-student-practices-and-their-impact-learning-spaces

Niche. (2020). 5 Advantages of Going to College in the Suburbs.

https://www.niche.com/blog/5-advantages-of-going-to-college-in-the-suburbs/