The costs associated with being a student at Kansas State have substantially increased over the last year at a rate faster than the consumer national average, according to the K-State Economics Club’s annual Student Price Index released Wednesday morning.
The SPI measures the changing prices of goods that a typical K-State student might purchase, including tuition, groceries, transportation, housing, utilities and entertainment. The United States Consumer Price Index does the same for a typical consumer at the national level.
According to data collected by the Economics Club, the SPI at K-State rose by 5.1 percent between September 2016 and September 2017. By contrast, the U.S. CPI only rose by 2.2 percent over the same period, according to information the Bureau of Labor Statistics released Wednesday morning.
This percentage increase in the SPI is the largest since 2011, when the SPI increased by 6.3 percent. Last year, the SPI had increased by just 2 percent, while the U.S. CPI increased by 1.4 percent in 2016.
The Economics Club’s report attributed the large increase in the SPI to “prices increasing dramatically in several key categories, even though there were some areas of student expenditure that were unchanged or showed some deflation.”
Dan Kuester, professor in economics and adviser for the Economics Club, said in the release that such a large increase is not a typical finding in the SPI, and it is not good news for students.
“One positive thing to note is the increase in tuition this year was significantly lower than the overall rate of student inflation,” Kuester said. “This is somewhat encouraging for our future inflation expectations for students.”
To create the SPI, members of the Economics Club collect data on prices and expenses from local stores during the third week of September every year.
“I felt like students enjoyed working in teams to collect this data,” said Dickson Ochanda, senior in economics and vice president of the Economics Club. “We use the SPI as a way to involve some of our new members in a real economics project.”
One expense that has gone up substantially is gasoline, with an increase of 16.7 percent in the average price of sampled locations.
“I suppose that this may lead fewer students to elect to travel home on the weekends, and possibly some of us may be more inclined to purchase ICAT tickets since those have not increased in price,” said Jorge Echauri, sophomore in economics and Economics Club member.
Textbooks saw the largest price increase at 31.8 percent, while non-Greek housing saw the largest price decrease at 6.5 percent. The press release attributed some of the changes in this year’s index to outliers in the data samples.
“[Outliers] made a big difference in the SPI value,” Ochanda. “But it does make sense as there are many vacant apartments in Manhattan. We learned in our principles classes that a surplus will lead to lower prices.”
“Dickson and I talked about how to try and account for outliers in the data,” Kuester said. “We have decided to keep a consistent bundle of goods, even though this may cost us a bit of predictability.”
Kuester said the Economics Club tries to account for advances in technology and changes in availability in the SPI.
“When the club elected to change from traditional books to e-books, that led to significant cost savings for students,” Kuester said. “But I feel this is accurate as many resources are now available for free online that used to cost students either significant time or money to obtain.”
The price of beer has increased by 16.7 percent alongside pizza prices increasing by 2.4 percent, while grocery and movie ticket prices have experienced decreases of less than 1 percent.
“I am sure many of my classmates will reduce either their number of trips to Aggieville or the beer consumed per trip,” said Will Weninger, junior in economics and treasurer of the Economics Club.
Weninger said the increase in the price of beer may actually be a positive for some students.
“Students may now choose to stay in on some weekends and focus on their studies while consuming relatively cheap delivered pizza and essentials they can buy at the grocery store,” Weninger said. “With movie tickets essentially unchanged, I expect some students to spend more of their entertainment dollars there.”
Kuester said the SPI is an excellent way for members of the Economics Club to apply what they’ve learned in the classroom to a real world scenario.
“This is a great project for our students every year,” Kuester said. “Dickson did a great job getting students involved in this project and everyone enjoyed their work. This is a fun way to get members involved with the club and to demonstrate how a price index works and is calculated.”