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Bergstrom & McAfee Open Letter to University Presidents and Provosts

See:  www.hss.caltech.edu/~mcafee/Journal/OpenLetter.pdf

An Open Letter to All University Presidents and Provosts Concerning
Increasingly Expensive Journals

by Theodore Bergstrom and R. Preston McAfee

For nearly a century, a symbiotic relationship existed between scholars
and scholarly publishers. Academics freely provided their discoveries,
work, and time editing and reviewing, and scholarly publishers provided
packaging and sold the output of the academics' labors for a modest
profit. This benefited both groups, because the publishers received the
most valuable inputs for free, while the academics were sheltered from the
business end of publishing and received the packaged output at reasonable
profits. As the primary concern of academics is the wide dissemination of
their ideas, the arrangement was suitable for both parties.

In the 1970s, some for-profit scholarly publishers discovered that library
demands for journals were remarkably unresponsive to price increases and
that the publishers could greatly increase their revenues by sharply
increasing their prices. This is evidenced by the dramatic disparity that
has emerged between the prices charged by for-profit publishers such as
Elsevier, Wiley, and Kluwer, those charged by non-profit societies and
university presses. This gap widened in the 1980s and further widened in
the 1990s, so that the for-profit journals charge about five times as much
per page and fifteen times as much per citation as the non-profits, as
evidenced by

Journal Prices by Discipline and Publisher Type*

          	Cost per Page 			Cost per Citation
             	For-Profit 	Non-profit 	For-Profit 	Non-Profit

Ecology 	$1.01 		$0.19 		$0.73 		$0.05
Economics 	$0.83 		$0.17 		$2.33 		$0.15
Atmosph. Sci 	$0.95 		$0.15 		$0.88 		$0.07
Mathematics 	$0.70 		$0.27 		$1.32 		$0.28
Neurosciences	$0.89 		$0.10 		$0.23 		$0.04
Physics 	$0.63 		$0.19 		$0.38 		$0.05

* From "The Costs and Benefits of Site Licences to Academic Journals",
Proceedings of the National Academy of Sciences, Jan. 04, by C.T.
Bergstrom and T.C. Bergstrom.

It is time to recognize a simple fact, and react to it. The symbiotic
relationship between academics and for-profit publishers has broken down.
The large for-profit publishers are gouging the academic community for as
much as the market will bear. Moreover, they will not stop pricing
journals at the monopoly level, because shareholders demand it.

So far, universities have failed to use one of the most powerful tools
that they possess: charging for their valuable inputs. Journal editing
uses a great deal of professorial and staff time, as well as supplies,
office space and computers, all provided by universities. In any other
business, these inputs would be priced. Academics consent to edit journals
and their departments offer them facilities and sometimes even released
time from teaching classes, because the goal of academic publications is
the promotion and dissemination of ideas. For those journals that uphold
their side of the bargain by setting reasonable subscription prices, this
policy remains a reasonable one. However, we see no reason for
universities to subsidize editorial inputs to journals that are priced to
extract maximum revenue from the academic community.

The prices set by profit-maximizing publishers are determined not by
costs, but by what the market will bear. For such publishers, the effect
of overhead charges is to recapture a portion of the monopoly profits for
the universities who produce the knowledge. In contrast, when the
university subsidizes editorial inputs of non-profit publishers, the
reduced costs enable the publishers to keep their subscription prices low
and hence to make publication more widely accessible.

We recommend the following policies.

(i) Universities should assess overhead charges for the support services
of editors working for journals that have basic library subscription rates
of more than a threshold level of cost per measured unit of product.

(ii) University libraries should refrain from buying bundled packages from
large commercial publishers and should set clear minimal standards of
costeffectiveness for individual journals to which they subscribe.

We believe that it is reasonable to figure that a journal editor who
handles about 100 papers annually would use about 20% of a secretary along
with the associated space and other overhead materials, an overhead charge
of at least $12,000 per year would seem appropriate.

While some have encouraged individual academics to boycott expensive
journals, such a challenge should occur at the university level. Overall,
it is the entire university community that is harmed by the draining of
library budgets and restrictions on dissemination of articles. The
university decides, or at least influences, what is done with its
resources, including faculty and staff time. Moreover, most professors
will be hesitant to refuse to work for journals perceived to be powerful
and important, no matter how over-priced such journals may be. Taking the
matter out of the individual's hands, however, has the major advantage
that a university can readily say "expensive journals will pay overhead
costs," and individual professors report that fact to journals, as a
matter of university policy.

We suggest that first an announcement in the form of a list of expensive
journals, for which the university will ultimately seek overhead expenses,
and an announced policy to discourage (but not prohibit) faculty
participation in the operation of such journals. The announcement should
specify a time, such as one year hence, at which point the university
would actually impose the charges on the journals that have not reduced
their library subscription prices to the threshold level.

We have created a website that lists the price per article and the price
per citation for about 5,000 academic journals. Using these statistics, we
have constructed an index of costliness for each journal in each of
several broadly defined disciplinary areas. Please see:


We used this index to construct lists of journals that we believe
represent poor value for university library subscription. Our criterion
for a journal to be "overpriced" is that a weighted index of the cost per
article and the cost per citation is more than two and a half times as
large as the median index for non-profit journals in the same discipline.
We suggest that universities assess overhead charges, and libraries not
subscribe to any of the journals on the "expensive" list. Of course
universities are invited to construct their own measures of journal
cost-effectiveness. Our website presents the data that can easily be used
to construct such measures.

We realize that individual universities should probably compose their own
policies, because broad collective action on pricing may risk an antitrust


R. Preston McAfee
J. Stanley Johnson Professor of Business, Economics & Management
California Institute of Technology

Theodore Bergstrom
Aaron and Cherie Raznick Chair of Economics
University of California - Santa Barbara