Issue 12, Fall 1996

William A. McEachern, Editor

The Evidence File

• In 1985 the U.S. government negotiated a fixed annual rent of 70,000 rubles for its official residence in Moscow. At the time, that was worth about $60,000. Because of hyperinflation of the ruble, 70,000 rubles was worth only $13 in September 1996. The U.S. government is apparently reluctant to renegotiate the rent.

• Thoreau advised, "Simplify, simplify," but until recently, that credo did not apply to consumer product lines. For example, Proctor & Gamble spent decades introducing variations of its existing products. Some economists would say the company did this to hog shelf space. As a result of all this product differentiation, the average supermarket sells about 30,000 different products. Sales are slow for some products (nearly one quarter of all products in a typical supermarket average fewer than one unit sold per month). But P&G has reversed its trend and has cut its product line by one-third during the 1990s (see Business Week's cover story, 9/9/96).

• Forbes just released its list of top-paid celebrities for 1995 and 1996. The top ten are:
  1. Oprah Winfrey ($171M)
  2. Steven Spielberg ($150M)
  3. The Beatles ($130M)
  4. Michael Jackson ($96M)
  5. Rolling Stones ($77M)
  6. Eagles ($75M)
  7. Arnold Schwarzenegger ($74M)
  8. David Copperfield ($74M)
  9. Jim Carrey ($63M)
  10. Michael Crichton ($59M), the first writer ever to make the top ten.

• According to the New York Times, records from 31 prestigious institutions indicate that last year these institutions used on average $3,765 from the average tuition and fee bill to support need-based scholarships; this amounted to about 20 percent of the average bill of $19, 110. Twenty years ago the portion of tuition and fees used to fund scholarships was 9%. This greater redistribution supposedly stems from declining government support for scholarships based on need and greater efforts to diversify student bodies. In the last decade, government funding dropped from 21% to 12% of need-based scholarships. About 47% of the students in the 31-college consortium receive scholarships based on need. In the 1995-96 academic year, $50.3 billion was available for financial aid from federal, state, and school sources at the 2,800 member colleges belonging to the College Board. This was up 75% in nominal dollars from a decade earlier. Most of the increase was in the form of student loans.

• The College Board found that undergraduate tuition and fees this year increased by an average of 6% at four-year public colleges and 5% at private colleges. This is down from double-digit increases earlier this decade. In-state tuition and fees now average $2,811 at public four-year colleges and $12,823 at private colleges. The average annual cost of two-year colleges was about half that of four-year colleges. Because most students attend public institutions, three out of four students pay less than $6,000 per year on tuition and fees and most pay less than $4,000.

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