A tale of 2 economics writers

Two takes on the university fee de-regulation this morning.

The first by the condescending hater of anyone other than company directors in business class, Judith Sloan, who slips this in early on: 

And no doubt the revolting students will continue to revolt for their selfish reasons.

Her charming tendency to throw in bitchiness continues unabated, then.*

Of course everything will be fine, she writes; universities won't up fees so much, these pathetic students complaining about a policy that descended out of the sky have nought to complain about.  (Even though she then goes on to identify a way it may still be problematic for government funding.)

The second is by Ross Gittins, who the economic dries of Catallaxy don't care for.

Whereas Sloan's analysis is (at heart) based on her confidence that free markets in everything always works out for the good, Gittins actually thinks deeper about what sort of "market" tertiary education is, and gives us some reasons why he thinks universities will charge higher, quite quickly:

In the early noughties, the Howard government allowed unis to raise their fees by 25 per cent. One small uni decided not to do so. It found its applications from new students actually fell. So the following year it put its fees up like all the others and its applications recovered.

In Britain, the Cameron government allowed unis to raise the £3000 annual fee they charged local students up to a limit represented by the £9000 fee charged to foreign students. Almost all of them took the opportunity to raise their fees to the maximum allowed.

Applications dropped by 9 per cent in the first year, but rose in subsequent years.
On the basis of all this, my guess is the sandstone unis will raise their fees a long way and the less reputed unis won't be far behind them.

Their notion of competition will be to make sure no one imagines a lesser fee than the big boys is a sign of their lesser quality.

I had actually heard from a former private high school teacher at one of Brisbane's major schools tell me that this happened when he was there -  the teachers were told that as the competing school was increasing their fees, of course they would be putting up there's too (with no costs justification, but just to make sure people didn't think their school was lesser quality.)

Guess which analysis I find more convincing?

*  Judith read the Gittins column, and starts off her criticism of it in what has now become pretty much her default snide, bitchy style.  

If you ask me, the announcements made over the weekend of the type of fee rises from a couple of the big universities sounded more supportive of Gittins than Sloan.  

I also part heard someone from Melbourne University this morning explaining that the reason that the VC's who wanted fee deregulation are now sounding hesitant about the government's policy is because they didn't plan on the government funding cut that is accompanying it.   (I think that was the gist of it, anyway.)