Page 67 - Crisis in Higher Education

Underlying Problem • 41

TABLE 2.2
Comparing Prices Changes among Components of Higher Education
Category 1982–1984 May 2016 Average for 2000
Books and supplies 100 666.3 279.9
Tuition and fees 100 702.5 324.0
Shelter 100 298.9 201.3
Food and beverage 100 247.6 168.4

Sources: Bureau of Labor Statistics, CPI Detailed Report: Data for May 2016:
Consumer Price Index for All Urban Consumers (CPI-U), 2016. http://
www.bls.gov/cpi/cpid1605.pdf; Bureau of Labor Statistics, Annual
Average Index for 2000: Consumer Price Index for All Urban Consumers
(CPI-U), 2016. http://www.bls.gov/cpi/cpid00av.pdf, 2016
Note: All CPI values in the table are based on 1982–1984 = 100 expect shelter,
which is based on 1982 = 100. The difference in basis is small and does not
significantly impact the comparisons.

cost of shelter and food. The baseline for these data is 1982–1984, so the
value for this time period is set at 100. As of May 2016, Table 2.2 shows that
“Education Books and Supplies” are at 666.3, which means the cost in May
2016 is 6.663 times higher than the cost was in 1982–1984. Using the same
logic, the cost of “Tuition and Fees” in May 2016 is 7.025 times higher than
the cost in 1982–1984. “Food and Beverage” cost and “Shelter” cost, which
are used as surrogates for apartment and dormitory living, have increased
by factors of 2.476 and 2.989, respectively. A caveat about these data is that
the baseline for “Shelter” is 1982 rather than 1982–1984. This small differ-
ence does not materially impact the data or the conclusions.
Table 2.2 also provides data from the year 2000, which is approximately
halfway between 1982–1984 and May 2016. These data illustrate that increases
for “Education Books and Supplies” and “Tuition and Fees” from 1982–1984
to 2000 are 279.9 and 324.9, respectively. 14,15 So the price for these items
increased 2.799 and 3.249 times, respectively. These values represent less than
half of the price increase from 1982–1984 to May 2016. Therefore, inflation
for “Education Books and Supplies” and “Tuition and Fees” has been a long-
term, continuing problem. In fact, these data indicate that the rate of inflation
for these items has accelerated since 2000. On the other hand, more than half
of the price increase for “Food and Beverage” and “Shelter” occurred from
1982–1984 until 2000. Thus, the price increases for these items decelerated
(meaning they increased at a declining rate) from 2000 to May 2016.
The primary reason for a much more subdued price increase for “Food and
Beverage” and “Shelter” is competitive and free markets. If dormitory rates
at universities skyrocket, students have other options such as living at home,