Surprise, surprise

I wonder if this is where the government gets the idea that raising the price on something such as cigarettes and booze will reduce its demand…

BBC.

There has been a 10% drop in the number of people from England applying to study in the UK when higher fees start, figures show.
The university admissions service, Ucas, says 46,413 fewer students from England have applied than at the same time last year.
The government said people still saw university as a good investment.
The UCU academics’ union said the figures highlighted the recklessness of raising fees to £9,000.
Anyone wishing to apply after 30 June will have to do so through clearing.
The reduction in applications has remained steady for the past few months, according to admissions service, Ucas.
But these latest figures come a few weeks before the final deadline for regular applications to university. The main deadline passed in mid-January.

It is true that by raising the price above a certain level you can reduce the demand, private companies will often do their level best to find the ideal market price to maximise demand and profits. Competition helps too, when there are similar products on the market from competing companies then those who can keep their own costs down will reap the benefit of higher sales. It all depends on the market you’re aiming at though, certain goods despite their high price will still sell as there is a demand for luxury products too, it all depends on what you’re aiming for.

By charging extra for education though the government have successfully reduced the demand for it, at least in England anyway. To many young people starting off in life with massive debts hanging over their heads is pretty much a non starter anyway, particularly in a recession with no realistic chance of a job when they finish. Yet unlike the market for booze and cigarettes where there is a viable and successful black market, the education ‘market’ in the UK is closed, particularly to the English who get charged fees no matter where they choose to go, unlike the Scots and Welsh in their own countries. So in a closed market price control works, or at least appears too with education costs for students.

I suppose it’s a shame no-one has yet come up with a way to emulate a black market in examinations and lectures, seems like we need one.

4 comments for “Surprise, surprise

  1. Andy Dwelly
    June 1, 2012 at 7:43 am

    Don’t need a black market. There’s a rapidly evolving international market in Uni courses online. Most recently it’s technically driven by Apples iUniversity app, but it’s been gradually developing for years. What’s mostly missing is a tutorial and exam/degree accreditation infrastructure but It seems inevitable that this will appear in short order.

    I’ve recently sat through 32 hours of an excellent course in a difficult but important IT technology taught from a college in rural US, and choked down part of a course out of Harvard on Graphics Processing units. Used both in my present work. The available courses run fom Math through to classical history, with huge choice in between.

    Bricks and mortar Universities are going to find it hard to compete with free lectures and low priced online tutorials.

    • June 1, 2012 at 10:39 am

      I agree – my son, while studying for an arts degree at a British university, has been unofficially ‘sitting-in’ on US lectures online as part of his research.

      There will surely come a point where young people like him will ask whether it’s really worth running up vast debts for six or seven hours a week of lectures and tutorials when virtual universities could provide the same services at a fraction of the cost.

      And when there is enough demand, surely the exams will follow.

  2. June 1, 2012 at 12:57 pm

    Too many young people starting off in life with massive debts hanging over their heads is pretty much a non starter anyway.

    There’s the rub.

  3. Furor Teutonicus
    June 2, 2012 at 1:04 pm

    XX I suppose it’s a shame no-one has yet come up with a way to emulate a black market in examinations and lectures, seems like we need one. XX

    You have. See all the “doctors” from third world countries, now working in Britain with “Doctorates” from such eminent universitys as “That one bedroom flat over the vindaloo shop, behind Ranjit the grocers on main street Bangalore”. And who learned English from the back of a corn flakes packet.

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