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ASSIGNMENT: Analyze university costs at a university with which you are familiar.
? First, evaluate the university’s price from the perspective of Baumol’s Cost Disease and
Bowen’s Revenue Theory of Cost. You may wish to look at the degree of tuition increases
over the last X number of years and/or compare the costs at that university to competitors or
others in a similar category to get a sense of how its costs are increasing. To what degree do
you see evidence of either or both? Which theory, if either, is the most compelling
explanation for the cost? Why? Where do you see evidence that the theories fail to account
for cost increases or total cost? Why?
? Second, based on the “25 Ways” paper from the Center for College Affordability and
Productivity, suggest strategies that the university might consider to reduce prices. Defend
your suggestions with evidence or logic.
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