Tuesday, July 26, 2011

Higher Education Bubble: College Tuition Doubled Over the Last 10 Years vs. +52% for Medical Care

The chart above illustrates graphically the "higher education bubble" by comparing the annual increases in the CPI for "College tuition and fees" (7.45% per year since 1978) to annual increases in the CPI for "medical care" (5.8% per year since 1978) to annual increases in the median price for new homes (4.3% per year) to the annual increases in the "CPI for all items" (3.8% per year). 

I would have to check to verify this, but I'm not sure there is any other item in the CPI that has gone up faster since the 1970s than "college tuition and fees." We hear a lot about rising medical costs, but those increases (5.8% per year from 1978 to 2011) are relatively minor compared to the increases in tuition (7.45% per year over the same period).  As as you can see from the graph, tuition increases have accelerated over the last decade.  Since 2000, college tuition costs have doubled while medical costs have gone up by "only" about 52%. 

Read more about the unsustainable "higher education bubble" at The Enterprise Blog.

8 Comments:

At 7/26/2011 1:16 PM, Blogger Benjamin said...

According to some guys who landed flying saucers at the last meeting of the Flat Earth Society in Utah, where Morgan Frank acts of Grand Superintending Vision Caliph, the rates of inflation Dr. Perry has used in this chart are way too low.

Therefore, in gold terms, indexed to Shadowstats Slide Rules, college tuition is actually less than 20 years ago.

 
At 7/26/2011 1:19 PM, Blogger t11s said...

How are the college tuition numbers measured?

It is well known that over 50% of students don't pay the "list price" of college. I've only seen one study that tried to figure out what the actual cost to students are.

Colleges perform tremendous price discrimination.

 
At 7/26/2011 2:13 PM, Blogger yamahaeleven said...

How about the cost of government, total of all levels?

 
At 7/26/2011 2:42 PM, Blogger morganovich said...

bunny-

more foolish babble from you, what a shock.

after the way you embarrassed yourself comment on sharecounts, i figured maybe you'd pipe down for a while, but i see that shame is no more a part of your makeup than intelligence.

i think the varnish fumes from your barstools have finally killed your last couple brain cells.

 
At 7/26/2011 5:57 PM, Blogger $9,000,000,000 Write Off said...

It'd be nice to see a graph showing the cost of key necessities: food, clothing, entertainment, transportation, housing, education, and medicine.

I suspect the last 3 would be rose crazily since 1970 while the others flattened or declined. I also suspect opinion polls would confirm that the last 3 sectors were a mess, but the others are humming along. Last, the evidence would show the heaviest Federal involvement in the last 3 sectors.

 
At 7/26/2011 7:13 PM, Blogger Buddy R Pacifico said...

"It is well known that over 50% of students don't pay the "list price".

t11s, please provide information to support what is otherwise grand speculation.

 
At 7/26/2011 7:53 PM, Blogger andyweintraub said...

I'm not sure how you get to 5.8% as the current rate of growth of the price of medical care. When I do the math, the percentage increase from a year ago comes to 2.9%, which is what is also found on the BLS website.
See http://www.bls.gov/news.release/cpi.t01.htm

 
At 7/26/2011 8:07 PM, Blogger Mark J. Perry said...

I'm calculating the average annual compounded rate of increase from 1978 to 2011, over a 33-year period.

 

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