A Tool to Assess Journal Price Discrimination

Abstract

This econometric study tests pricing practices of publishers and their monopoly power. It suggests that traditional publishers will retain their market clout as they shift to offering electronic publications. Librarians’ common experience with price discrimination was corroborated by a powerful model comparing prices charged to institutions while holding constant for production costs, source of publication, discipline areas, and the availability of titles in electronic format. The model also provides a robust selection tool to compare actual prices to model-predicted prices among the subscriptions within any given collection and to predict those that, statistically, are significantly overpriced. The study results reveal that commercial publishers are not the only ones that appear to over-price titles by a statistically significant amount. Campuses face continued increases in prices for traditional and electronic resources, but statistical modeling offers an opportunity for controlling costs.