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Economics of Scholarly Communication
Background
What is causing the rise in prices?
The Scholarly Communication Market
Background
Over the last two decades, the costs of scholarly publications, particularly journal subscriptions, has increased at a rate that
far surpasses both the rate of inflation as measured by standard indexes such as the consumer price index (CPI) and the growth
in library budgets. The net effect is that libraries are greatly constrained in the amount of important scholarship that they
can provide to their users. Often, libraries must make difficult choices to cancel important and quality journals in order
to simply keep up with inflation. As a result, faculty and researchers are seeing a shrinking percentage of the total scholarly
output available at their institutions. While libraries have developed innovative cooperative services and cost saving measures
to counteract the rising costs of scholarly publications, these are not enough to balance the market realities of this
unsustainable trend.
Monograph and Serial Expenditures in ARL Libraries, 1986-2006
Data from the the Association of Research Libraries show that while the
CPI increased 68% between 1986 and 2006, monograph costs increased 78%. Even more dramatically, journals and other serial publications increased in price by 180%.
Not only did the average costs of these publications increase, but the amount of published scholarly content did as well. The ARL reports that between 1986 and 2003,
the amount of published serial titles increased by 138%. With university and library budgets remaining relatively flat over the same period,
the result is that research libraries spend more money on proportionally fewer publications. For many institutions, periodic journal \
cancellations are now the norm and affected titles are no longer only those considered marginal.
What is causing the rise in prices?
One of the main reasons for the increase in serials costs is the growing consolidation in the scholarly publishing market.
Over the past decade, several mergers have occurred within the industry with the result being increased concentration of
scholarly publishing into the commercial segment of the market. While this is occurring across disciplines, it is most
pronounced in the science, technology, and medicine (STM) segment. In a 2006 study of ecology journals, Bergrstrom and Bergstrom
show that commercial publishers simply charge more for their journals - both as a cost per page and a cost per citation - than both non-profit
publishers and joint for-profit/non-profit ventures (Bergstrom, C. T., & Bergstrom, T. C. (2006). The economics of ecology journals. Frontiers in Ecology and the Environment, 4(9), 488-49
5.).
While commercial publishers have certainly added significant value to their journals in terms of online access and other enhancements, the
price differentials have serious implications for stretched library collections budgets.
What is different about the scholarly communication market?
"Markets for information goods such as computer software or journal access are quite different from those for ordinary
commodities such as shoes or houses."
- Bergstrom, C. T., & Bergstrom, T. C. (2004). The costs and benefits of librarysite licenses to academic journals. Proceedings of the National Academy of
Sciences of the United States of America, 101(3), 897-902.
As opposed to ordinary commodities, any piece of scholarship cannot be considered as a direct substitute for another piece of scholarship.
That is, one journal article cannot automatically fill the same need as a related article. Each is unique and contributes to the scholarly conversation.
In order to accomodate this, and to serve faculty and researchers, libraries seek to provide a portfolio of relevant scholarship across the disciplines. The need
to provide a portfolio of scholarship to users, helps to explain why it is not feasible to simply cancel journals in response to publisher price increases. As a result,
the scholarly communication market exhibits inelastic characteristics with demand not decreasing relative to increases in prices.
In addition to the need to provide access to a portfolio of relevant research across the disciplines, libraries' budgets are also strained by publishers transition to
differential pricing models. While the electronic environment reduces costs of distribution, commercial publishers have been reluctant to pass along the savings to libraries.
In contrast to the print environment where a journal price was standard across institutions, publishers now often charge prices based on an institutions Carnegie classification
or FTE count. The result is often higher costs across the board for larger institutions such as NC State whether it is a STM or a humanities journal.
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