

How Private Colleges Are Like Cheap Sushi - tokenadult
http://www.npr.org/blogs/ed/2014/07/08/329889370/how-private-colleges-are-like-cheap-sushi

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dkhar
The main idea of this story is that private colleges are like used cars:
They've got a high sticker price that's almost always haggled down "because
you're not just any student/customer." The resulting anchoring effect makes
people more likely to see private college tuition as a value.

Here's my contribution to the discussion: The article interviews a professor
at Wharton (that's part of UPenn, a private college), and one at UMinnesota (a
public college) who's advising the college administration to start following
the private college model. I did a little snooping, and found out that the
author is a Yale graduate. So this is similar to some used car owners (and
someone who thinks his dealership should get into used cars) talking about how
used car dealerships are deceptive about their pricing.

Edit: I thought a little more about this, and I've decided that this is a
pattern caused by information asymmetry. The whole price negotiation game with
used car dealerships really stopped being super profitable when the internet
made it easy to figure out how much a given vehicle was "supposed to" cost.

I wonder if we could do the same for college tuition...

~~~
infocollector
How about we start with a law that forces Colleges/Universities to open all
information regarding admissions / tuition?

~~~
dkhar
Well, private colleges are essentially businesses. I'm not sure if the
government can mandate them to release information about their... clients?

That said, we don't need super personal data. Summary statistics would be
fine.

On that note, the NPR article cites this survey[1], wherein participating
private colleges contributed data that was then used to calculate aggregate
statistics about students in the US in general.

What we'd want is probably more specific than that. We need per-school
statistics, so that trends in how colleges charge and discount may be
identified (what if colleges on the East coast are more likely to mark down
tuition? What if advertised tuitions are relatively constant, but actual
tuition paid varies with cost of living? these are interesting threads to
explore). The difference between the average student's tuition after grants
and the sticker price, along with the standard deviation of that distribution,
would be a good place to start. Quantiles would be even better.

[1]
[http://www.nacubo.org/Documents/about/pressreleases/2013TDSP...](http://www.nacubo.org/Documents/about/pressreleases/2013TDSPressRelease.pdf)

~~~
xux
Sure you can, depending on how heavily the industry is regulated. Ex. SEC
requires public companies to release certain financial data.

~~~
hueving
Not even the same ballpark. Releasing the total revenue and costs for a
quarter is nothing like releasing the price each client paid.

------
hgh
What the article misses, though a few commenters pick it up, is that this
discounting is also a form of price discrimination to maximize profits. The
institution will charge each customer based on their willingness (ability) to
pay. The schools are actually in a great position to do this because of the
fine granularity of the grant amounts and the willingness of their customers
to divulge their willingness to pay.

A counterbalance to this though is that bright students are as much the
product as they are the customers, especially in elite schools, where building
up networks is a key driver of demand.

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fatjokes
I know this is completely not the point of the article, but I know exactly
which sushi joint it's talking about in the beginning:
[http://sushiparknyc.com/](http://sushiparknyc.com/). Unlike the author, I've
been to it a few times. It's exactly the same as 90% of the sushi restaurants
in NYC---unspectacular, but you get what you paid for.

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gefh
Or maybe it's just the start of the end of the education pricing bubble, and
they're trying to land gently.

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rahimnathwani
Is there an existing dataset showing the mean (or, better, median) price paid
(net of discounts) by students for each combination of college, course and
matriculation year?

~~~
dkhar
I'm really interested in this stuff, and I did some Googling along these
lines. The most useful thing I've found so far is this "Common Data Set"
initiative[1] that essentially has colleges fill out a form covering basic
summary statistics (e.g. total dollars given in financial aid, number of
students admitted, etc). You can look up "common data set [college name
here]," and probably find their version of the form.

I'll try and do some more research and maybe analyze some of the CDS data
tomorrow. If you find anything interesting, please post it as well!

[1] [http://www.commondataset.org/](http://www.commondataset.org/)

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michaelfeathers
I'm surprised there wasn't a tie-in to healthcare pricing.

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gilgoomesh
I realise the article is about Private Colleges but it opens with some fairly
odd fears about cheap sushi. The author needn't (necessarily) fear cheap
sushi:

1\. Sushi doesn't necessarily contain any fish and almost never contains
ingredients "flown around the world". You can make a Makizushi or Futomaki
roll _very_ cheaply using vegetarian or cured ingredients. Even when it does
contain fish, it could be canned tuna or processed crab sticks (less tasty
than fresh but durable) or cured salmon.

2\. Sushi can only really sit in a display fridge for about 8 hours before the
rice dries out. At the end of the day, everything is marked down for quick
sale. It's not necessarily poor quality, it just needs to be sold quickly. If
you see a sign that says "All sushi, 50% off", this is probably what's going
on.

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slobo
I think the author might be talking about one of those Chinese eateries with a
very permanent "50% off" sign attached to the store-front.

