Each year, the K-State Economics Club publishes its annual K-State Student Price Index. For the past eight years, the club has come together, taken an integral part of the national economy and molded it into a model that specifically applies to K-State students.
The U.S. Bureau of Labor Statistics reports each month on the national Consumer Price Index. According to the Bureau, the CPI measures the average change over a specific time period in the prices paid by consumers for a basket of goods and services. The basket is an average of purchases most relative to consumers across the United States, like gasoline, housing and food products.
K-State students in the club take this information and change the basket to represent college students as opposed to families. Goods like gasoline are still important, but weight is given to items like textbooks, pizza and beer.
Andrew Wagner, sophomore in business administration and president of the club, coordinated the efforts of several club members who visited local restaurants, grocery stores, gas stations, bars and movie theaters to gather information about prices.
“We know from our economics classes that students respond to incentives by purchasing goods that are relatively less expensive,” Wagner said. “This means we should expect the rational student to be more willing to purchase goods that they otherwise might do without. It is encouraging in these difficult economic times to see lower prices for textbooks, gasoline, beer and groceries.”
For the first time in the eight-year history of the K-State SPI, the average price of a bundle of goods typically purchased by a K-State student has fallen relative to the previous year, according to a press release.
The SPI decreased by 0.2 percent from 2008. This decrease was driven by prices falling in several key categories of the index. One year ago, the SPI had increased by 7.3 percent due primarily to a 37 percent increase in the price of gas from 2007.
Figures released last week by the Bureau of Labor Statistics indicate prices paid by urban consumers (as measured by the U.S. Consumer Price Index), have increased by only 0.2 percent. Prices are unusually stable for both students and the overall population.
Katie Gorham, senior in economics and treasurer for the club, said she collected prices for this project.
“I observed that prices of nonnecessary goods have decreased or increased only slightly,” Gorham said. “Prices of beer, Internet services, iPods and pizza have all remained reasonably priced.”
Gorham said she noticed some businesses have not taken students into consideration when they figure their prices.
“Apparently Seth Childs Cinema has not caught on to this trend and thinks that students have unlimited income,” Gorham said.
Increases/decreases in student price index from the 2008 figures for 2009:
Gasoline -37.4 %
Groceries -6.5 %
Tuition +3.8 %
Beer -18.9 %
Housing +5.2 %
Textbooks -7.1 %
Pizza -2.6 %
Movies +9.1 %