Educational materials & supplies costs decline!
Nicole Finkbeiner
| nicole finkbeiner ASSOCIATE DIRECTOR, INSTITUTIONAL RELATIONS OpenStax, Rice University (713) 348-2972 openstax.org |
bart852
If Mark had used the CPI for "college textbooks" and not the broader index which includes supplies and other stuff, the average new retail price actually increased 4.4% from October last year to September this year, which is roughly covering the purchasing season for spring 2017 and fall 2017 semesters. The average so far this year through the first nine months is 3.8% increase, which is below average, however is in line with 2014 calendar year which had a 3.9% increase. There is a noticeable dip in the CPI starting in June 2017 through September and that should continue for next few months, where it should really be felt for Spring 2018 semester.
So what is going on here? You have to look at the Producer Price Index (PPI), that is the wholesale price -the prices the publishers set- because the CPI mostly trails what happens in the PPI, except increasingly in the secondary market, where NACS' financial surveys of college store prices have been showing a decline in used textbook price averages while new prices increased -in other words the gap between what happens in the new book prices and the used and rental prices is growing and the rental market grew as well as OER adoptions, and that in part explains why publishers have had to lower prices, along with dealing with declining enrollments in their most profitable segments in the for profit college sector.
The PPI, from October 2016 to September 2017 index for college textbooks is negative 1.3%. Keep in mind this index on average goes up 6.3% since 2007. The last four months of the PPI data are preliminary, but that said the last two months saw slight increases in prices which would likely be kicking in for Spring semester, so we will see where we end up in February to see what happens (at least for new textbooks) for fall 2017 semester.
Historically we have never seen in the history of the PPI index which goes back to 1980 sustained wholesale price deflation. Part of the delay in the CPI is the major pubs didn’t really cut prices until close to the beginning of the Spring 2017 semester buying and Pearson did their big price cuts in the middle of Spring rush after most students had purchased.
So what needs to be watched is the CPI for months of typical purchasing for fall 2017 and more particularly Spring 2018 terms as that is where the impact of the PPI reductions may be felt favorably by students, if the trends in the PPI continue....
Rich Hershman, NACS
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