Thanks, Mitch.
Individual prices depend on supply and demand. The supply of “elite” education (I don’t agree that Harvard is necessarily better than, oh, NC State or Hillsdale, but that’s the perception) has remained almost fixed for decades (Princeton is expanding its entering class, I hear, but student body growth at the top schools has been miniscule). On the other hand, the demand for it has grown dramatically. The main reason for that is the increasing wealth in the country. What average prices have done since 1982 is irrelevant. What’s crucial is the tremendous increase in wealth since then. There are far more rich parents and grandparents now than in the past, and our colleges and universities have figured out that they can siphon off a large portion of that wealth by charging high prices for their product.
True, most colleges and universities are non-profit entities, but the people who run them like to maximize revenues just as much as any businessman does. Instead of profits for shareholders, they find innumerable ways of spending all of the inflow.
