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Point taken, but it's very common to adjust by CPI (or some other price index) when comparing prices over time.

All attempts to track prices over time have some flaw. But not adjusting for inflation in a chart that goes back ~20 years could also be perceived as misleading.

Moreover, we are starting to see growth in real median wages again. They are already above Q4 2019: https://fred.stlouisfed.org/series/LES1252881600Q. So I think it is fair to say in some sense that the real price of attendance has started to go down (albeit not that much).

You're correct on all counts.

EDIT: The rest of my comment below is (as pointed out below by gruez) incorrect. The article did say 'in 2021 dollars' in reference to one set of numbers, and it's reasonable to assume they meant that to apply to all the other numbers in the same paragraph.

It's still surprises me that The Economist would use CPI-adjusted figures, but fail to mention the adjustment. Using CPI-adjusted figures is common, but it's not the default, which is why people often add 'in real terms' or some other qualifier.

>It's still surprises me that The Economist would use CPI-adjusted figures, but fail to mention the adjustment

Are we reading the same article?

>A report from the College Board, a non-profit, shows that whereas published tuition and fees for private non-profit colleges increased from $29,000 in 2006-07 to $38,000 in 2021-22 (in 2021 dollars), the net price actually decreased from $17,000 to $15,000.

"in 2021 dollars" clearly implies CPI adjustment.

Oops. I missed that.

The figures that surprised me were the ones at the end of that sentence (the 'drop' from $17k to $15k). I reread that part, didn't see anything about constant dollars for those numbers, and then went looking for the source data.

Measuring college costs against median household wages (vs. CPI) is a much fairer way to include impacts of inflation. First off, college tuition is part of the CPI, so it's not really mathematically accurate to then discount it based on CPI increases: "College is a lot more expensive, but don't worry, everything is a lot more expensive!"

And if you look at any graph of college costs vs wages over the past 40 years or so, they have simply skyrocketed.

> And if you look at any graph of college costs vs wages over the past 40 years or so, they have simply skyrocketed.

Absolutely, no debate there. The particular surprising claim in question though was about whether they have declined in the past couple of years, relative to a peak in late 2010s. And there, measured either in CPI adjusted costs, or relative to real median wages, they have.

But of course, the drops are small, and it's only been about 1-2 years. I'm not sure this really indicates a sustained trend, or just the fact that college cost increases have (for once) lagged inflation over those 1-2 years.

>Measuring college costs against median household wages (vs. CPI) is a much fairer way to include impacts of inflation

"inflation" is by definition CPI. Therefore the claim that using another metric to "include the impacts of inflation" is tautologically false. The word you want is "affordability".

No it's not. There are many different US government measured indexes of consumer price inflation. The linked article discussed CPI-W (used by law to adjust social security payments), CPI-U, chained CPI-U (used to adjust tax rates), and PCE (used by the Fed for interest rate targeting).

https://www.brookings.edu/articles/how-does-the-government-m...

There is also PPI for producer prices, and the GDP deflator used for GDP.

If the US government and law already is using a number of different metrics to account for inflation impacts for different purposes, it absolutely makes sense to debate which particular measure is best for this area.

But there's not one single true number, different groups of people are affected by different measures (e.g. the use of CPI-W for social security payments is thoughtfully meant to be more representative of costs incurred by the typical social security recipient than is CPI-U)

>If the US government and law already is using a number of different metrics to account for inflation impacts for different purposes, it absolutely makes sense to debate which particular measure is best for this area.

Fair point, but in the context the previous comment, "wages" is basically never considered a serious contender for measuring inflation in economics.

Tautologically false, has to be one of the oddest things I've ever seen to be so wrong about.

Like, you're using big words to indicate that under no situation is this true, when the reality is that "inflation" is not by definition CPI. CPI is one measure of inflation.

But it just caught my eye that this seems, extra wrong. It's hard to read something extra wrong on the internet, and yet it feels like you've succeeded.

People are wrong on all of the time, but to call something tautologically false when it's trivially true, is peak wrongness.

>> All attempts to track prices over time have some flaw.

The thing to compare tuition to is teacher pay. At today's tuition rates, 10 or less students would pay their professors salary. Average class sizes are much larger, so it's obvious the money is going somewhere else. Done. Forget CPI, the schools are pricing based on perceived value, not cost, and an unlimited supply of government backed loans.

This seems to be the most obvious point to me: at my alma mater, you could literally rent a classroom at the university for $90/4 hours[0], or $7200 for 16 weeks at 20 hours/week. Then we have assistant/associate professors in the college of engineering who have been working at the university for 10+ years making $45k or less[1] for a full time position. One of them could rent a room, charge 10 students $6.7k each, and come away with $60k. They'd make significantly more than they are now, the students would receive better/more direct instruction, and the students would be paying ~half list price ($6700 vs $13200 for in-state students)[2]. Even with merit scholarships, if you had a 3.7 high school GPA, that saves you $5000[3], so you're on the hook for $8k, and 10 kids renting a room with an assistant professor would still be cheaper. The numbers are even more absurd for out-of-state students.

Clearly, the value proposition for a university is not the education it provides. Even if you wanted the atmosphere of being on campus all day, the rent-a-room strategy would give you that for far less with smaller classes. Obviously it would be hard to be taken seriously if you did this, so the issue is that you must pass through the university system to receive credentials, and for many fields these credentials are non-optional.

Even spending $100k/yr on a PhD evaluating students full-time, and spending an entire 1 week per student to rigorously personally evaluate them 1:1, you could charge $2000 total to attempt an evaluation for credentials, allowing non-traditional students to self-study for free. If we want to make education and accreditation more attainable for everyone, we need to separate granting of credentials from studying. Study requirements are redundant with a rigorous exam, and particularly for fields where exams are already in place for credentials (law, accounting, capital-E Engineering, etc.), study requirements should be barred.

[0] https://registrar.arizona.edu/support-services/classroom-ser...

[1] https://www.azcentral.com/pages/interactives/news/local/ariz...

[2] https://www.arizona.edu/admissions/first-year/cost

[3] https://financialaid.arizona.edu/types-of-aid/scholarships/i...

Wage growth has more than exceeded CPI: https://www.aei.org/carpe-diem/chart-of-the-day-hourly-wages.... You're thinking of some other measure, such as so-called "productivity growth."

You're probably right, but one caveat: this graph shows average hourly earnings, which may not account for inequality. If some percentage of the population has had their wages rise much faster than everyone else, it could be that most people have had their real wage decline, while the average is still above CPI growth.

Now that I think about it, it also tracks hourly earnings, and if a non-insignificant people work hourly, but have been scheduled less hours (due to automation, or reduced need for labor), then their hourly earnings may have gone up, but their take-home pay gone down.

If anyone has any statistics for either of these, that would be very useful.

I was going to object that:

- this data misses people who transitioned to gig work or other types of self-employment, and

- looking at average (mean) can be misleading due to large numbers at the top

BUT... it appears that median household income has also gone up faster than CPI, which means those objections are likely irrelevant.

https://fred.stlouisfed.org/series/MEHOINUSA672N

Do you have any more current data on wage growth vs inflation that include more current years? 2020/2021/2022? The data you cited stops in 2014.

CPI just makes prices from different years comparable. If you want to compare numbers, they need to be comparable.

If you want to weigh in changes in wages, taxes, etc, that can be very relevant, but ignoring inflation is not a good way to do that.

>This is an important distinction because, when people pay for college, they're not comparing it with the cost of other goods and services (which is what CPI measures), but whether they can afford it, based on their parents' current/past income, or their own future expected income.

>[...] Wages for many people haven't kept up with CPI, so a higher nominal net cost still makes college less affordable.

Wages have kept up with CPI, at least for the period that The Economist mentioned: https://fred.stlouisfed.org/series/LES1252881600Q

I suppose you could claim that wages for everyone hasn't kept up with inflation/tuition rises, but that's not the claim that The Economist is addressing and is basically cherry-picking.

Is it important to point out college like housing and Healthcare increase far faster than anything else? So a recent down trend added to a larger up trend is still net expensive?

> they're not comparing it with the cost of other goods and services (which is what CPI measures), but whether they can afford it, based on their parents' current/past income, or their own future expected income.

Going to university should be viewed in the same light as a financial investment, there is no guarantee it will improve your standard of living, except perhaps through networking, a case of who you know not what you know that matters, the old school tie network, that sort of thing.

For example, the police when charging people dont ask what your educational achievements are or where you studied. So are some university's going to increase your chances of ending up in prison or do they make you an untouchable Clarke in their field of knowledge? https://www.youtube.com/watch?v=Yk4wX4FPRzE&t=6s

In a way, the police are hiding the poor standards of the state educational system by not publishing this data, let alone capturing it for data analysis and they are also protecting the reputation of university's.

Likewise the course offered, is it relevant for today and the future or are they teaching courses on subject matter which is becoming irrelevant? Look at how quickly some things have changed over the last twenty years.

And the obvious elephant in the room, is how many people have studied a degree which is relevant to their current employment and past employment? In other words, does having a university degree show you can play nicely with others and evolve from academic speak to corporate speak?

Again backing up the impression the university's are selling knowledge on the subject matter you want to learn, but its not their job to find you employment pertaining to the subject matter you have studied. This applies to all universities.

So then the networking potential is relied upon and if you happen to work for a business which values university degrees highly, then there is a level of "obedience to authority" which can be applied as a factor to that business.

Take Goldman Sach's, AFAIK their policy is to recruit only graduates and to let a % go every 3 years irrespective of company performance, so this displays an unconscious bias towards university's and their reputation.

Some large companies like a drug company will actively sponsor some aspect of a university in order to influence what is taught on the course and lets them have first access to the students, who show potential, or obedience to the scientific theory of the day, which happens to be lucrative for the business. In biology there are lots of theories, mainly because there is still so much undiscovered potential in the body.

Some university courses will also likely land you a job in a quango, which if your aspirations are muted, will set you up for life because serving on a quango can be highly lucrative, if everyone tows the line.

In my time, none of this was explained to me, and I doubt it is now, but if you have a parent who has been through the uni process, especially one of the more prestigious uni's, you be made aware of what to look for, especially if you are the type that likes to name drop your university name. mic drop....

> Going to university should be viewed in the same light as a financial investment

This is a good way to think about it in the USA, but IMO going to university should be viewed in the same light as going to high school or trade school -- ie, a public good, available to all, and required of some subset of the population to ensure the continuing function of a modern society.

Countries with this system seem to spend less and get better outcomes from their higher education systems.

You fail to draw any attention of the recruiting practices of the security services. They haunt the corridors of learning with the complicit knowledge of the university staff, tapping the shoulders of new recruits. University's also work closely with the security services, professors are often used to manipulate and direct students into lines of research.

So when viewing the damming reports on the police (and military) being institutionally racist, I would go even further to argue that not only are these institutions racist, the university staff appear to enable these criminal practices, fuelling prejudice, discrimination and anti-meritocratic ethos by allowing such relationships to exist.

Thats the last thing I would want from a UK university, but the security services are hardly stealth or intelligent about their recruiting practices, perhaps demonstrating their hubris and pride before a fall.

I could argue that the USA approach to only having loyalty to money, breaks down these criminal institutions that masquerade as the pillars of society that think of themselves beyond reproach, an idea that cant be killed, because if you only have loyalty to money, you hold neither prejudice, racist or discriminating views of someone so long as their money is good.

So can you really sit there and argue the UK model is ethically better, unless of course your idea of a functioning society is one that secretly harbours racist, prejudicial, anti-meritocratic, royal right to rule characteristics?