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Re: Value-based pricing: right Idea, wrong measure

What are "prices that are not commensurate with the value they provide to libraries and their communities"? The value will be different in different circumstances. Even in one institution, the value of a particular article or journal may vary from one day to the next. Much of the value resides in the availability rather than in the usage. And what we are prepared to pay, i.e. how we value things, is a judgement that underlies market economics. We, society at large, justify paying more for top researchers than for beginning ones; we justify putting more expensive equipment in one laboratory than in the next. We put more money in one research project than another. We balance the price and the value we perceive to be getting. If we give ourselves a chance to come to fair prices for the services of publishing, then we have gained a lot.

The current subscription system doesn't easily give us that chance. Nobody knows what a fair price is. Cost-based pricing would make a small number of very popular journals less expensive, but an awful lot more niche journals, now in effect cross-subsidised, a lot more expensive. Do niche journals have a higher or lower quality? Or value? We are, absurdly, measuring "cost per download," "cost of citation" and the like and believe we are measuring value. Has anybody ever approached, say, the proceedings of a parliamentary debate in that way? Even just as a thought experiment? What is 'usage' anyway? Scientific articles are important documents. The only thing that valuing them by their usage and citation does is to make the usage and citation potential of articles into criteria for publishing them, instead of their intrinsic scientific merit. Thus making a brilliant article that few understand seem pretty worthless. And - possibly worse - making a poor, but controversial, popular, and fashionable article seem the more valuable of the two. Surely, that can't be where we want to go?

Jan Velterop


On 18 Jan 2007, at 22:12, Phil Davis wrote:

I was never a fan of comparing the price of academic journals to an
index that included breakfast cereal, apartment rent, and women's
dresses [1].  I'm even less inclined to believe that the Producer
Price Index used by the University of California Libraries is any
better a comparative measure.


From the Bureau of Labor Statistics web page, "The category for

consumer goods other than foods and energy includes durables such
as passenger cars and household furniture and nondurables such as
apparel and prescription drugs." [2]

A journal is highly dependent upon people doing the production
work.  While a new machine can punch out 5 times as many wiggets
per hour than in 1980, the output per knowledge worker is more or
less static.  This is why cost savings are hard to find in higher
education, which by the way, are increasing by about 3-4% per year
[3], and evoke much more concern from the public than the price of
a scientific journal.

This is not to defend those publishers who charge prices that are
not commensurate with the value they provide to libraries and their
communities [4].  Analyses like the kind proposed by the University
of California Libraries are desperately needed.  My chief concern
is how one systematically calculates something as aloof as "value"
and what index one uses to compare price inflation.  The CPI and
PPI for consumer goods, I believe, are both inadequate for such
comparisons.

--Phil Davis


Notes:

[1] What goods and services does the CPI cover?
http://www.bls.gov/cpi/cpifaq.htm#Question_7

[2] Chapter 14. Producer Prices. http://www.bls.gov/opub/hom/
homch14_b.htm

[3] Higher Education Price Index.
http://www.umass.edu/oapa/publications/factbooks/05-06/finances/
FB_fi_03_bot_2005.pdf

[4] Journal Cost-Effectiveness Tables and Graphs
http://www.people.cornell.edu/pages/pmd8/prices.pdf