The Mother of All Graphs
This graph looks more interesting the more you look at it. It is almost a micro- course in economics. Costs of domestic origin are rising, those of importation are falling. So, globalization is protecting us from inflation--or allowing us to tolerate new inflationary sources like medical care and education. And diversions are becoming more and more affordable while necessities are less so. Tradable commodities are sensitive, non-tradables are not. The greater the degree of government involvement in the provision of a good or service the greater the price increases over time. And what does it say about the "demand" component?
A few other observations/speculations:
We can expect future declines in the prices of college textbooks, as the traditional textbook market faces increasingly tough competition from alternative options including hundreds of “open textbooks” that have been funded, published, and licensed to be freely used, adapted, and distributed. The University of Minnesota’s Center for Open Education maintains an “Open Textbook Library” website that lists hundreds of textbooks in more than 20 academic subjects that are available for free online or as a PDF file, or as a print copy at a low-cost ($33.50 for print copies from OpenStax). Just in the field of economics, there are more than 20 free open textbooks for Economics courses including Principles of Microeconomics, Principles of Macroeconomics, International Economics, Money and Banking, Economic Analysis and Principles of Political Economy.
The annual increase in college tuition and fees of only 1.7% through December of last year was the smallest yearly increase in the history of the CPI for college tuition and fees for any month going all the way back to 1978. And the year-over-increase of 1.7% for college tuition through December was less than annual CPI inflation of 2.3% over that same period, indicating the real cost of college tuition and fees actually decreased in 2019. So perhaps the “higher education bubble” is finally starting to show signs of deflating?
This graph looks more interesting the more you look at it. It is almost a micro- course in economics. Costs of domestic origin are rising, those of importation are falling. So, globalization is protecting us from inflation--or allowing us to tolerate new inflationary sources like medical care and education. And diversions are becoming more and more affordable while necessities are less so. Tradable commodities are sensitive, non-tradables are not. The greater the degree of government involvement in the provision of a good or service the greater the price increases over time. And what does it say about the "demand" component?
A few other observations/speculations:
We can expect future declines in the prices of college textbooks, as the traditional textbook market faces increasingly tough competition from alternative options including hundreds of “open textbooks” that have been funded, published, and licensed to be freely used, adapted, and distributed. The University of Minnesota’s Center for Open Education maintains an “Open Textbook Library” website that lists hundreds of textbooks in more than 20 academic subjects that are available for free online or as a PDF file, or as a print copy at a low-cost ($33.50 for print copies from OpenStax). Just in the field of economics, there are more than 20 free open textbooks for Economics courses including Principles of Microeconomics, Principles of Macroeconomics, International Economics, Money and Banking, Economic Analysis and Principles of Political Economy.
The annual increase in college tuition and fees of only 1.7% through December of last year was the smallest yearly increase in the history of the CPI for college tuition and fees for any month going all the way back to 1978. And the year-over-increase of 1.7% for college tuition through December was less than annual CPI inflation of 2.3% over that same period, indicating the real cost of college tuition and fees actually decreased in 2019. So perhaps the “higher education bubble” is finally starting to show signs of deflating?
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