College and Research Libraries


Letters 
To the Editor: 

I am pleased to see that our recent article, "Journal Price Escalation and the Market 
for Information: The Librarians' Solution" (College & Research Libraries 53[Nov. 1992]: 
523-35), provoked a worthwhile discussion of the application of economic models and 
academic research to real-world problems. I feel compelled to respond and clear up 
some misconceptions in the comments of Robert Michaelson, James Talaga, and David 
Lewis, "Letters" (College & Research Libraries 54[Mar. 1993]: 173-76). 

First, although I, unlike David Lewis, believe that the invention and improvement of 
the photocopier have contributed to an increase in serials prices, I have recently been 
convinced that the increase in the number of faculty over the past two decades has also 
contributed to this problem. This is the argument suggested by Roger Noll and W. 
Edward Steinmueller (Serials Review 18[1992]: 32-37) and what I believe David Lewis 
refers to in his letter as a change in the "scale and scope of scholarship." 

Second, we state three times in the text of the article that publishers maximize profits, 
which Lewis and Talaga seem to have overlooked in their reading. However, the 
diagrams and tables do not use profit maximizing points in order to maintain the 
simplicity of the argument for using Ramsey prices in this market. It is standard to 
ignore profit maximizing prices when illustrating Ramsey taxes in most undergraduate 
public finance textbooks (for example, Public Finance by David Hyman, Dryden Pr., 
1993, 402), since the results do not change regardless of the prices used. In the example 
from our paper, when profit maximizing prices are used in both markets ($48 for 
libraries and $23 for individuals, not $50 and $19 as Talaga states), Ramsey prices will 
improve the welfare of society by increasing the welfare of libraries and their patrons 
by more than the decrease in the profits of publishers. Implementing Ramsey prices 
using photocopy prices changes the size and elasticity of demand in both market 
segments and results in a different set of profit maximizing prices for publishers. While 
using profit maximizing prices is technically correct, it significantly increases the 
complexity of the diagrams and the tables but does not change our results. 

Ramsey prices are standard fare for public finance economists who analyze optimal 
tax policy. Clearly, librarians have a more limited set of tools than governments do. In 
this case, the price of photocopying appears to be the only tool librarians have to 
implement Ramsey prices. 

What will happen if the price of photocopying for faculty is raised is debatable. 
Unlike Talaga and Lewis, I feel that an increase in photocopy fees will have an effect 
on the volume of faculty photocopying. While faculty typically do not pay for their 
photocopying, university deans and department chairs do make faculty aware of 
budget restrictions through different mechanisms to share university resources. Unlike 
Talaga, I do not feel that publishers can simply increase their prices to capture these 
photocopy profits. Talaga's argument assumes that university administrators would 
not decrease library resources to offset the increase in photocopy revenues and that 
libraries now value the heavily photocopied journals more than before because these 
are now the revenue-generating journals. Would the librarian's assessments of the value 
of a journal change because that journal is now a money-maker? 

Finally, unlike Robert Michaelson, I feel that we are better off using time-tested 
models from economics to analyze economic problems. Is Michaelson suggesting that 

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Letters 355 

the alternative is to use subjective speculations and anecdotal evidence to find the 
solution to this problem? 

This is precisely the problem of the "electronic journal solution" proposed by 
Michaelson, Lewis, and a host of others. Many librarians and academics see the low 
marginal cost of disseminating a copy of an electronic article and the fact that few 
electronic journals charge a fee as evidence that electronic journals will solve the current 
problem of serials price escalation. However, without rigorous economic analysis we 
must admit that we do not know what macro-economic savings or costs will result. 

The simplest economic model of electronic journals is identical to a model of high-
priced print journals that are not sold at a lower price to individual subscribers. In either 
case, if the quality and quantity of the journal are maintained and publishers make an 
economic profit, the journal will have a higher price. Replacing the library and. in-
dividual subscriber markets with a single subscription that is received by the library or 
university computer center increases the value of the single subscription. An increase 
in the journal's value to the university enables the publisher to charge a higher price 
for the single subscription than in either of the two market segments. Electronic journal 
models that suggest lower prices always rely on a fundamental change in the market-
such as more nonprofit publishers, universities retaining copyright, or a lower quality 
of refereeing-which are unrelated to the electronic technology. 

Lewis and Michaelson seem convinced that electronic journals will dramatically 
lower serials prices and create a new market for the transfer of information. Their failure 
to use economic methods to support their arguments leaves me unconvinced. In fact, I 
am willing to bet both gentlemen $100 that the growth of electronic journals does not 
reduce the libraries' serials budgets at Northwestern University and the University of 
Connecticut over the next fifteen years. 

BRUCE R. KINGMA 
Assistant Professor 
School of Information Science and Policy 
Department of Economics 
University at Albany 

P.S. In response to the letter by Richard M. Dougherty and Brenda L. Johnson, I 
apologize for what they feel is a misrepresentation of their views. I mistakenly con-
strued comments such as ''Prices have increased well in excess of inflation rates and 
publishing costs," "If the European Journal of Phannacology has to endure competition 
such as that experienced by Time and Newsweek, we would guess that subscription 
prices would not display the pattern we have observed over the past few years," and 
other comments (Library Journal [May 15, 1988]: 27-29) as implying they felt greedy 
publishers were to blame for price increases. I recommend their 1988 article to readers 
interested in this subject. In fact, I have my students discuss that article in my graduate 
class on the economics information. 

To the Editor: 
"Indexing Adequacy and Interdisciplinary Journals: The Case of Women's Studies," 

by Gerhard, Jacobson, and Williamson (College & Research Libraries 54[Mar. 1993]: 
125-35), was of real interest to anyone working in an interdisciplinary field. I would 
like to commend the authors and the editor for making it available to us. 

I would also like to suggest that we do have other access points to these and other 
significant journals in UnCover. I did a quick study of the titles in tables 1--6 and found 
that all but sixteen of the ninety-six titles are indexed in UnCover. The titles excluded 
are primarily those in lesbian studies, which may reflect new journal titles or lack of 
collection development in the area. On April20, only two of the six titles from the lesbian 
list were included. However, all of the law journals are included as well as most of the 



356 College & Research Libraries July 1993 

titles from the other tables cited in the article. Presently, two major library systems 
holdings are being added to UnCover, those of the University of Hawaii and the 
University of Maryland. I expect that their holdings will increase the representation of 
women's studies journals. I imagine that many of the document delivery services in 
development will also give greater access to often neglected journals. 

Access on UnCover includes key work and the ability to browse the tables of contents 
of the journals indexed. While full subject access is desirable, we all benefit from the 
technology that supports access to previously neglected journal titles. 

NORMAJ. HERVEY 
Preus Library 
Luther College 
Decorah, Iowa