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If it delivers the same value to the student, shouldn't it still be worth $30,000? The input costs are irrelevant. If it is only worth $20,000 now, which may v

If it delivers the same value to the student, shouldn't it still be worth $30,000? The input costs are irrelevant. If it is only worth $20,000 now, which may very well be true, value has been lost. So, what value is lost? I imagine it will be a lot harder to make new friends and find new lovers when you spend your time at home on a computer instead of mingling at school. Were people previously paying $10,000 per year (to stick with your numbers) to make friends and find lovers?

sushshshsh 6y ago
Students don't precisely control the ability to vote with their feet and drive market pricing for a college degree though, right? Virtually all institutions cluster around some specific yearly price, especially those schools that are competitive to enter. Additionally, since students (buyers) can obtain large loans to attend school, they are able to make relatively irrational market decisions such as paying $30,000 per year for tuition. The thing you said about paying for what a thing is worth ($30,000) instead of what it costs to produce that thing ($20,000) is correct. If I buy a car like that, theoretically I'm able to walk away from the deal if I don't feel like it's worth $30,000, and the seller might eventually lower his price to $20,000 if he never finds a buyer at his desired price. But I think with colleges, the presence of loans and zeitgeist irrationally motivate people to buy something for $30,000, and then if they do happen to pay off their loans they assume that they got $30,000 of worth out of it... But I think that isn't true, since most employers aren't treating a bachelor's degree very seriously these days.
- randomdata 6y ago
  I'm not sure it makes any difference if the perception of value is irrational or not. It remains, for a student to want to spend $30,000 on school, they have to have a belief that it is worth $30,000 to them. If tuition was instead $300,000, a lot more people would balk at the idea. The outstanding question remains on whether or not the perception of value has declined with these announcements. If so, what perceived value has been lost in that transition? Presumably the education is still being provided.
  - sushshshsh 6y ago
    How do we measure that it is really worth $30,000? You are saying it's worth it because someone wants to pay it. Maybe that's true, but TSLA stock has been worth anything from $200 to $1400 in the past few years. The actual worth to the bagholder in the event of the bubble popping is negative. For your other point, yes, at an apples to apples comparison, the receipt of college credit and education/knowledge should remain the same. But the cost to produce it should be lower. And I'm arguing that the cost savings will not be passed on to the student, because there is no market mechanism that allows them to negotiate the price of their education.
    - randomdata 6y ago
      > How do we measure that it is really worth $30,000? It is not a question of what it is really worth (which is rather meaningless as nothing has some kind of absolute worth that is written into the cosmos), only what people see it as worth and are willing to pay. > Maybe that's true, but TSLA stock has been worth anything from $200 to $1400 in the past few years. Of course. The perception of value of a given thing is naturally going to change from person to person and from moment to moment. In this case we're talking about moment to moment. Because it was worth $30,000 to someone last year does not necessarily mean it is worth $30,000 to them today, as their knowledge has changed. But, if the perception of value has declined, the question is: What has changed? > But the cost to produce it should be lower Even if it were free to produce, if it is worth $30,000, then it would be logical to charge $30,000. Input costs are irrelevant. To emphasize that point, it could cost $30,000 to produce, but if people only want to pay $20,000 you can't charge $30,000. You're going to lose money. People lose money producing things all the time. Input costs are irrelevant.

sushshshsh 6y ago

Students don't precisely control the ability to vote with their feet and drive market pricing for a college degree though, right? Virtually all institutions cluster around some specific yearly price, especially those schools that are competitive to enter. Additionally, since students (buyers) can obtain large loans to attend school, they are able to make relatively irrational market decisions such as paying $30,000 per year for tuition. The thing you said about paying for what a thing is worth ($30,000) instead of what it costs to produce that thing ($20,000) is correct. If I buy a car like that, theoretically I'm able to walk away from the deal if I don't feel like it's worth $30,000, and the seller might eventually lower his price to $20,000 if he never finds a buyer at his desired price. But I think with colleges, the presence of loans and zeitgeist irrationally motivate people to buy something for $30,000, and then if they do happen to pay off their loans they assume that they got $30,000 of worth out of it... But I think that isn't true, since most employers aren't treating a bachelor's degree very seriously these days.

randomdata 6y ago
I'm not sure it makes any difference if the perception of value is irrational or not. It remains, for a student to want to spend $30,000 on school, they have to have a belief that it is worth $30,000 to them. If tuition was instead $300,000, a lot more people would balk at the idea. The outstanding question remains on whether or not the perception of value has declined with these announcements. If so, what perceived value has been lost in that transition? Presumably the education is still being provided.
- sushshshsh 6y ago
  How do we measure that it is really worth $30,000? You are saying it's worth it because someone wants to pay it. Maybe that's true, but TSLA stock has been worth anything from $200 to $1400 in the past few years. The actual worth to the bagholder in the event of the bubble popping is negative. For your other point, yes, at an apples to apples comparison, the receipt of college credit and education/knowledge should remain the same. But the cost to produce it should be lower. And I'm arguing that the cost savings will not be passed on to the student, because there is no market mechanism that allows them to negotiate the price of their education.
  - randomdata 6y ago
    > How do we measure that it is really worth $30,000? It is not a question of what it is really worth (which is rather meaningless as nothing has some kind of absolute worth that is written into the cosmos), only what people see it as worth and are willing to pay. > Maybe that's true, but TSLA stock has been worth anything from $200 to $1400 in the past few years. Of course. The perception of value of a given thing is naturally going to change from person to person and from moment to moment. In this case we're talking about moment to moment. Because it was worth $30,000 to someone last year does not necessarily mean it is worth $30,000 to them today, as their knowledge has changed. But, if the perception of value has declined, the question is: What has changed? > But the cost to produce it should be lower Even if it were free to produce, if it is worth $30,000, then it would be logical to charge $30,000. Input costs are irrelevant. To emphasize that point, it could cost $30,000 to produce, but if people only want to pay $20,000 you can't charge $30,000. You're going to lose money. People lose money producing things all the time. Input costs are irrelevant.