October 28, 2014
Econ Club releases the 2014 Student Price Index
The cost of living for an average Kansas State University student has once again increased at a greater rate than the average cost of living for an American, according to recently released data by the Kansas State University Economics Club.
The 2014 Student Price Index, compiled by the university's Economics Club, increased by 4.7 percent from 2013, significantly more than national averages over a comparable period. The index is based on prices collected on a bundle of goods a typical Kansas State University student purchases compared to the previous year's prices. The increase in the student price index is attributed to prices rising in several key categories such as housing, tuition and groceries. The 2014 index increase is less than the 2013 index increase, which was 6.4 percent.
The index indicates a larger increase in prices than the national average. Figures by the U.S. Bureau of Labor Statistics indexing prices, paid by urban consumers across the nation, as measured by the U.S. Consumer Price Index, indicated that national prices increased by 1.7 percent over the preceding 12 months ending in and calculated in September 2014.
Since the Economics Club started collecting data for this project in September 2002 the index has approximately doubled. This means the bundle of goods that a typical Kansas State University student purchases has doubled in price since 2002, while the bundle of goods that a typical American consumes — indicated by the U.S. Consumer Price Index — has increased in cost by only 31.5 percent.
Christa Deneault, vice president of the Kansas State Economics Club and senior in economics from Concordia, coordinated the efforts of several club members who visited local restaurants, grocery stores, gas stations, bars, bookstores and movie theaters to gather information regarding annual pricing during the third week of September.
"According to our estimates housing and tuition costs make up about two thirds of the average student budget," Deneault said. "The price of these goods are up approximately five percent from last year. It is not a surprise that the overall student price index increased by just under five percent."
"It may be a bit alarming for many people to see that the bundle of goods our typical student purchases has doubled since 2002." said Dan Kuester, faculty advisor to the Economics Club. "It certainly has become relatively more expensive to attend college than to purchase other goods in the past 12 years but the overall value of a K-State degree continues to be a relative bargain in my opinion. There continues to be a significant wage and employment premium associated with earning a college degree at Kansas State."
"This is a great project for our students every year," Kuester said. "We get the chance to demonstrate how a price index is calculated and our bundle closely mirrors what the Bureau of Labor Statistics does with the consumer price index."
Approximately 20 students were surveyed for the project and during club meetings students discussed how they could improve the student price index while continuing to provide consistent data.
"It is eye opening to recognize how severely college students are affected by inflation," said Hannah Jones, a senior in economics from Overland Park and president of the economics club. "The increase in the price level of groceries and beer — at four percent and 20 percent respectively — was not something that I anticipated observing. For better or worse, those students who elect not to buy beer are not as heavily impacted by inflation according to our study."
Jesse Maine, a senior in economics from Shawnee, helped collect data for the project.
"Part of my job was to compare movie prices from last year," Maine said. "I have noticed that the prices of some goods such as pizza and movies have experienced little or no inflation from last year. I believe this is because students in the Manhattan area have so many options as to how to spend their disposable income that some local businesses have to be highly competitive in their pricing."
There was some good news in the data students collected. Pizza and ICAT ticket prices were unchanged while the price of Internet services and gasoline fell.
Isa Cricco, a senior in economics from Paraguay, is the secretary of the economics club.
"I was pleased to observe a fairly substantial — 11 percent — decrease in gasoline prices," Cricco said. This, along with housing prices, is very important to both our students and to the population at large."
A breakdown of each section of the student price index is:
Gasoline — decreased 11 percent
Groceries — increased four percent
Tuition — increased 5 percent
Beer — increased 20 percent
Non-Greek housing — increased 15 percent
Greek housing — decreased 5 percent
Textbooks — increased 15 percent
Movies — increased 3 percent
ICAT — unchanged
Internet — decreased 12 percent