in the discount method the optimality of the investment is assessed at the margin and the resulting rates of returns are compared with that of alternative investments for instance blondal et al while the discount method has the advantage of summarising various benefits and costs associated with further education it often relies on more broadbrush average earnings across educational groups failing to control for other relevant individual characteristics in its simplest form the log of gross earnings is regressed on educational attainment linear and quadratic terms capturing labour market experience tenure and other relevant individual characteristics the coefficient of educational attainment is interpreted as the percentage wage differential due to an additional educational investment the major advantage of this approach lies in its simplicity