Dollars and sense
An analysis of the economic effects of Minnesota State's off-campus alcohol policies
by Submitted by the MSU Economic Club
Issue date: 9/30/08
Section: Voices
MSU's new disciplinary policy regarding off-campus alcohol-related incidents has caused an uproar among the campus community. Much of the controversy has surrounded issues like students' rights and the university's jurisdiction over its students.
The members of MSU's Economics Club agree that an economic analysis of the situation would aid the current discussion, and help to raise the level of discourse from purely emotional reactions to a coherent and well-reasoned analysis of the pros and cons of the new policy.
From the university's standpoint, the biggest concern is that the poor behavior of inebriated students imposes negative externalities on the community - that is to say, there is pressure from the community to do something about the property vandalism and loud, rowdy behavior that some students engage in while intoxicated.
We all have had nights that have been interrupted by noisy people hanging around outside the apartment who have consumed a little too much. While we students may be forgiving of activities considered typical of college life, others in the community don't feel the same way. Students must realize that when tuition is heavily subsidized by tax dollars, the university is responsible to those taxpayers.
Mankato Public Safety records a sharp spike in arrests of MSU students during the last week of August (move-in week). This is strong correlative (albeit not causative) evidence that points up the hill to MSU.
Having said that, some concerns over the new policy remain. First, we think that the effectiveness of the new sanctions is questionable. An additional fine may be a disincentive to students, as it increases the cost of getting caught, although it doesn't increase the likelihood of getting caught. Economic research into the drinking habits of college students indicates that the most effective way to decrease student drinking is to make alcohol more expensive.
This is hardly surprising - basic economic knowledge of the law of demand dictates that as the price of a good increases, the quantity of that good that people demand will decrease.
The members of MSU's Economics Club agree that an economic analysis of the situation would aid the current discussion, and help to raise the level of discourse from purely emotional reactions to a coherent and well-reasoned analysis of the pros and cons of the new policy.
From the university's standpoint, the biggest concern is that the poor behavior of inebriated students imposes negative externalities on the community - that is to say, there is pressure from the community to do something about the property vandalism and loud, rowdy behavior that some students engage in while intoxicated.
We all have had nights that have been interrupted by noisy people hanging around outside the apartment who have consumed a little too much. While we students may be forgiving of activities considered typical of college life, others in the community don't feel the same way. Students must realize that when tuition is heavily subsidized by tax dollars, the university is responsible to those taxpayers.
Mankato Public Safety records a sharp spike in arrests of MSU students during the last week of August (move-in week). This is strong correlative (albeit not causative) evidence that points up the hill to MSU.
Having said that, some concerns over the new policy remain. First, we think that the effectiveness of the new sanctions is questionable. An additional fine may be a disincentive to students, as it increases the cost of getting caught, although it doesn't increase the likelihood of getting caught. Economic research into the drinking habits of college students indicates that the most effective way to decrease student drinking is to make alcohol more expensive.
This is hardly surprising - basic economic knowledge of the law of demand dictates that as the price of a good increases, the quantity of that good that people demand will decrease.
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