An Interesting Inflation Graphic

February 22, 2011

I found this link on facebook the other day. Check it out: CPI Categories Since 2000. From what I can tell, they got their numbers for college tuition from the BLS like I did. I’m not sure why their numbers are so much higher than mine are.

2 responses to An Interesting Inflation Graphic

  1. That is crazy how much faster education costs are growing compared to everything else.

    I don’t think that is ‘inflation’ though, as in money-printing caused inflation. I think it has more to do with supply/demand economics: more and more people are attending universities, and they are not building new universities to handle the demand (so they can easily get away with charging more).

  2. I suppose supply and demand might have something to do with it, but I would myself blame two factors.

    1) Increasing medical costs. Since the primary budget item of colleges is salaries and benefits, this is significant.

    2) Decreasing state revenues. As the states have felt the budget pinch of this and the previous recession, allocations to state schools have been reduced and the difference has been made up by tuition raises.

    You cited potential demand. It actually wouldn’t surprise me that falling enrollments could be a factor. After all, smaller enrollments require greater tuition since the costs are spread among a smaller pool. That would have to do with changes of demographic.