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"Facts do not cease to exist because they are ignored." -Aldous Huxley

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wFriday, October 21, 2005


ATTENTION KMART SHOPPERS: Over at his website, Steve Sailer has an interesting discussion about price discrimination and college tuition. Firms routinely offer different prices for the same item, depending on how many hoops you're willing to jump through. If you're willing to clip coupons, send in rebates, or come in on limited sale days, you'll pay less for goods.



These are all imperfect but useful mechanisms for the poor to buy goods for non-budget-busting prices, the more well off to buy items at their leisure at greater expense, and business to make tidy profits. As with businesses, so with colleges. There is the total sticker price of a college and then there's what people actually pay. The applicant and his, her, or its parents fill out financial disclosure forms with a number of colleges and the schools tell them how much they're willing to discount tuition. The would-be customers can use this price information to help choose a college.

Of course, colleges have long hated this price competition and have recently found a way around it. Several major league colleges have banded together to circumvent market restraints by offering uniform standards for financial aid packages. If businesses coordinated pricing in the same way, it would be massively illegal, but the law waives that requirement for educational institutions. Now, in the name of reducing "confusing variation," students will have one deal. Like it or lump it.

Sailer writes:

Don't you just hate it when one college offers to lower your tuition payment by $10,000, a second college wants to knock $15,000 off, and a third offers $20,000 off? It's so confusing trying to figure out which of those three numbers is biggest! But, now, thanks to [coordination] all three colleges will offer you $8,000 off! Isn't that less confusing?

It's definitely more depressing.

posted by Jeremy at 6:35 PM