Table of Contents

Preface I. Setting the Stage 1. Why Do Costs Keep Rising at Selective Private Colleges and Universities? 2. Who Is in Charge of the University? II. Wealth and the Quest for Prestige 3. Endowment Policies, Development Policies, and the Color of Money 4. Undergraduate and Graduate Program Rankings 5. Admissions and Financial Aid Policies III. The Primacy of Science Over Economics 6. Why Relative Prices Don't Matter 7. Staying on the Cutting Edge in Science IV. The Faculty 8. Salaries 9. Tenure and the End of Mandatory Retirement V. Space 10. Deferred Maintenance, Space Planning, and Imperfect Information 11. The Costs of Space VI. Academic and Administrative Issues 12. Internal Transfer Prices 13. Enrollment Management 14. Information Technology, Libraries, and Distance Learning VII. The Nonacademic Infrastructure 15. Parking and Transportation 16. Cooling Systems VIII. Student Life 17. Intercollegiate Athletics and Gender Equity 18. Dining and Housing IX. Conclusion 19. Looking to the Future 20. A Final Thought Appendix. Defined Benefit and Defined Contribution Retirement Plans Notes Acknowledgments Index

Promotional Information

Ron Ehrenberg's comprehensive and important analysis of rising college costs is based on both his professional expertise as an economist and his practical experience as a member of the central administration at one university: Cornell. With insight, candor, and rigor he examines the arms race' among selective universities, reviewing the role of each of the major participants-trustees, presidents, deans, faculty, local, state and federal governments, and, not least, tuitionpaying students-in ratcheting up the level of tuition. Pointing to the fate of hospitals and medical centers, he cautions that self-regulation and institutional restraint are needed to prevent loss of public confidence and possible federal regulation. This book deserves widespread attention, both within the academic community and beyond it. -- Frank Rhodes, former President, Cornell University Balanced, sensible, and informed, Tuition Rising is a valuable addition to the literature on higher education. Giving the reader a lot of very useful empirical analysis, Ehrenberg demonstrates the value of being an economist. Anyone about to become a college administrator will want to read this book with great care. -- Henry Rosovsky, former Dean of the Faculty of Arts and Sciences at Harvard University, and author of The University: An Owner's Manual Ehrenberg demonstrates in convincing detail that private universities do not easily make economically efficient choices. The culprits are variously loose budget constraints, relatively little hierarchical authority, decentralized units that do not share the universities' goals, poor institutional design, poor public policies, political vulnerability, and the pious blindness of faculty. Tuition Rising is interesting, well-argued, and provocative. It ought to he required reading for presidents, provosts, and trustees of elite private research universities. -- Michael Rothschild, Dean, Woodrow Wilson School of Public and International Affairs, Princeton University What makes Tuition Rising so valuable and so much fun is its combination of facts, analysis, and administrative war stories. So, for instance, the importance to a college of national rankings, like US News's, is supported by careful econometric analysis (kept in the background, as are all technical jargon and argument), put under a microscope to understand the reasons for their often-quirky rankings, and then followed into Cornell's business school to see how "managing to the rankings"--the collegiate version of "teaching to the test"--can make sensible university-wide administration very difficult. -- Gordon Winston, Professor of Economics, Williams College Economists are sometimes accused of possessing "an irrational passion for dispassionate rationality." This book describes what a first-rate economist learned in trying to introduce greater rationality to the decision-making of a great university, a place that emerges as passionate and ambitious, but markedly reluctant to make hard choices. The account is sobering, illuminating, and immensely entertaining. Both those who love universities and those who love rationality will enjoy this book. -- Michael McPherson, President, Macalester College

About the Author

Ronald G. Ehrenberg is Irving M. Ives Professor of Industrial and Labor Relations and Economics at Cornell University and Director of the Cornell Higher Education Research Institute.

Reviews

In Tuition Rising: Why College Costs So Much, Ronald Ehrenberg provides a concise and compelling explanation of the influence of academic governance processes on rising university expenditures and tuition charges… His book is a rare and insightful primer on the intersection of governance and finance.
*Academe*

A thorough book on the behind-the-scenes and publicly-acknowledged factors for tuition increases at our nation’s 3,600 public and private universities. The author offers recommendations on how colleges can hold down costs such as sharing of resources and for specialized courses to be simultaneously taught at multiple institutions.
*California Education News*

[Ehrenberg] argues that colleges are risk-averse and slow to react to market pressures, traits that serve to keep tuition high. Another factor affecting tuition in recent years, Ehrenberg writes, is that colleges have felt pressure to follow other professions in which salaries are rising in return for greater productivity. ‘Faculty productivity tends not to increase over time,’ he says. ‘If you want to give faculty salary increases, you have to generate outside revenue or raise tuition. And universities have not been good at generating outside revenue.’
*Chronicle of Higher Education*

Why is college so expensive? Ronald Ehrenberg has an answer. The short version: Elite universities want to excel at everything they do, and excellence is expensive. The complete answer would fill a book. In fact, it has. Ehrenberg’s Tuition Rising: Why College Costs So Much exposes the forces that drive up tuition and reveals how hard it is for administrators to slow the ascent.
*Cornell Magazine*

Ehrenberg has written a book about the economics of institutions of higher education that will be clear and understandable to the general public. With great care and thought he addresses the issues that drive the costs of colleges and universities. I recommend it to parents, faculty, policy makers, trustees, and even to those running our educational institutions.
*Michael A. Baer, Senior Vice President for Programs and Analysis, American Council on Education*

Economists are sometimes accused of possessing ‘an irrational passion for dispassionate rationality.’ This book describes what a first-rate economist learned in trying to introduce greater rationality to the decision-making of a great university, a place that emerges as passionate and ambitious, but markedly reluctant to make hard choices. The account is sobering, illuminating, and immensely entertaining. Both those who love universities and those who love rationality will enjoy this book.
*Michael McPherson, President, Macalester College*

Ron Ehrenberg’s comprehensive and important analysis of rising college costs is based on both his professional expertise as an economist and his practical experience as a member of the central administration at one university: Cornell. With insight, candor, and rigor he examines the ‘arms race’ among selective universities, reviewing the role of each of the major participants—trustees, presidents, deans, faculty, local, state and federal governments, and, not least, tuition-paying students—in ratcheting up the level of tuition. Pointing to the fate of hospitals and medical centers, he cautions that self-regulation and institutional restraint are needed to prevent loss of public confidence and possible federal regulation. This book deserves widespread attention, both within the academic community and beyond it.
*Frank Rhodes, former President, Cornell University*

Balanced, sensible, and informed, Tuition Rising is a valuable addition to the literature on higher education. Giving the reader a lot of very useful empirical analysis, Ehrenberg demonstrates the value of being an economist. Anyone about to become a college administrator will want to read this book with great care.
*Henry Rosovsky, former Dean of the Faculty of Arts and Sciences, Harvard University, and author of The University: An Owner’s Manual*

Ehrenberg demonstrates in convincing detail that private universities do not easily make economically efficient choices. The culprits are variously loose budget constraints, relatively little hierarchical authority, decentralized units that do not share the universities’ goals, poor institutional design, poor public policies, political vulnerability, and the pious blindness of faculty. Tuition Rising is interesting, well-argued, and provocative. It ought to he required reading for presidents, provosts, and trustees of elite private research universities.
*Michael Rothschild, Dean of the Woodrow Wilson School of Public and International Affairs, Princeton University*

What makes Tuition Rising so valuable and so much fun is its combination of facts, analysis, and administrative war stories. So, for instance, the importance to a college of national rankings, like U.S. News’s, is supported by careful econometric analysis (kept in the background, as are all technical jargon and argument), put under a microscope to understand the reasons for their often-quirky rankings, and then followed into Cornell’s business school to see how ‘managing to the rankings’—the collegiate version of ‘teaching to the test’—can make sensible university-wide administration very difficult.
*Gordon Winston, Professor of Economics, Williams College*

In Tuition Rising: Why College Costs So Much, Ronald Ehrenberg provides a concise and compelling explanation of the influence of academic governance processes on rising university expenditures and tuition charges... His book is a rare and insightful primer on the intersection of governance and finance. -- Edward P. St. John * Academe *
A thorough book on the behind-the-scenes and publicly-acknowledged factors for tuition increases at our nation's 3,600 public and private universities. The author offers recommendations on how colleges can hold down costs such as sharing of resources and for specialized courses to be simultaneously taught at multiple institutions. * California Education News *
[Ehrenberg] argues that colleges are risk-averse and slow to react to market pressures, traits that serve to keep tuition high. Another factor affecting tuition in recent years, Ehrenberg writes, is that colleges have felt pressure to follow other professions in which salaries are rising in return for greater productivity. 'Faculty productivity tends not to increase over time,' he says. 'If you want to give faculty salary increases, you have to generate outside revenue or raise tuition. And universities have not been good at generating outside revenue.' -- Andrew Brownstein * Chronicle of Higher Education *
Why is college so expensive? Ronald Ehrenberg has an answer. The short version: Elite universities want to excel at everything they do, and excellence is expensive. The complete answer would fill a book. In fact, it has. Ehrenberg's Tuition Rising: Why College Costs So Much exposes the forces that drive up tuition and reveals how hard it is for administrators to slow the ascent. * Cornell Magazine *
Ehrenberg has written a book about the economics of institutions of higher education that will be clear and understandable to the general public. With great care and thought he addresses the issues that drive the costs of colleges and universities. I recommend it to parents, faculty, policy makers, trustees, and even to those running our educational institutions. -- Michael A. Baer, Senior Vice President for Programs and Analysis, American Council on Education
Economists are sometimes accused of possessing 'an irrational passion for dispassionate rationality.' This book describes what a first-rate economist learned in trying to introduce greater rationality to the decision-making of a great university, a place that emerges as passionate and ambitious, but markedly reluctant to make hard choices. The account is sobering, illuminating, and immensely entertaining. Both those who love universities and those who love rationality will enjoy this book. -- Michael McPherson, President, Macalester College
Ron Ehrenberg's comprehensive and important analysis of rising college costs is based on both his professional expertise as an economist and his practical experience as a member of the central administration at one university: Cornell. With insight, candor, and rigor he examines the 'arms race' among selective universities, reviewing the role of each of the major participants-trustees, presidents, deans, faculty, local, state and federal governments, and, not least, tuition-paying students-in ratcheting up the level of tuition. Pointing to the fate of hospitals and medical centers, he cautions that self-regulation and institutional restraint are needed to prevent loss of public confidence and possible federal regulation. This book deserves widespread attention, both within the academic community and beyond it. -- Frank Rhodes, former President, Cornell University
Balanced, sensible, and informed, Tuition Rising is a valuable addition to the literature on higher education. Giving the reader a lot of very useful empirical analysis, Ehrenberg demonstrates the value of being an economist. Anyone about to become a college administrator will want to read this book with great care. -- Henry Rosovsky, former Dean of the Faculty of Arts and Sciences, Harvard University, and author of The University: An Owner's Manual
Ehrenberg demonstrates in convincing detail that private universities do not easily make economically efficient choices. The culprits are variously loose budget constraints, relatively little hierarchical authority, decentralized units that do not share the universities' goals, poor institutional design, poor public policies, political vulnerability, and the pious blindness of faculty. Tuition Rising is interesting, well-argued, and provocative. It ought to he required reading for presidents, provosts, and trustees of elite private research universities. -- Michael Rothschild, Dean of the Woodrow Wilson School of Public and International Affairs, Princeton University
What makes Tuition Rising so valuable and so much fun is its combination of facts, analysis, and administrative war stories. So, for instance, the importance to a college of national rankings, like U.S. News's, is supported by careful econometric analysis (kept in the background, as are all technical jargon and argument), put under a microscope to understand the reasons for their often-quirky rankings, and then followed into Cornell's business school to see how 'managing to the rankings'-the collegiate version of 'teaching to the test'-can make sensible university-wide administration very difficult. -- Gordon Winston, Professor of Economics, Williams College