MSU's new disciplinary policy regarding off-campus alcohol-related incidents has caused an uproar among the campus community. Much of the controversy has surrounded issues like students' rights and the university's jurisdiction over its students.
The members of MSU's Economics Club agree that an economic analysis of the situation would aid the current discussion, and help to raise the level of discourse from purely emotional reactions to a coherent and well-reasoned analysis of the pros and cons of the new policy.
From the university's standpoint, the biggest concern is that the poor behavior of inebriated students imposes negative externalities on the community - that is to say, there is pressure from the community to do something about the property vandalism and loud, rowdy behavior that some students engage in while intoxicated.
We all have had nights that have been interrupted by noisy people hanging around outside the apartment who have consumed a little too much. While we students may be forgiving of activities considered typical of college life, others in the community don't feel the same way. Students must realize that when tuition is heavily subsidized by tax dollars, the university is responsible to those taxpayers.
Mankato Public Safety records a sharp spike in arrests of MSU students during the last week of August (move-in week). This is strong correlative (albeit not causative) evidence that points up the hill to MSU.
Having said that, some concerns over the new policy remain. First, we think that the effectiveness of the new sanctions is questionable. An additional fine may be a disincentive to students, as it increases the cost of getting caught, although it doesn't increase the likelihood of getting caught. Economic research into the drinking habits of college students indicates that the most effective way to decrease student drinking is to make alcohol more expensive.
This is hardly surprising - basic economic knowledge of the law of demand dictates that as the price of a good increases, the quantity of that good that people demand will decrease.
Furthermore, economists will tell you that people tend to make decisions at the margins, or incrementally, at the time of consumption. If this new penalty isn't calculated into the cost of each additional drink at the time of the purchase (or consumption), all other things being equal, then the effect on students' consumption of alcohol can be expected to be minimal. Alternatively, a city-wide alcohol tax may be more effective, although with that we run into problems of unfairly penalizing non-student Mankato residents.
We're also skeptical of the effectiveness of any required "re-education" classes. The administration may be out of luck in seeking behavioral changes; current behavioral economic research into college drinking patterns suggests that a students' personalities, peers and time-preferences (preference for immediate gratification vs. delayed gratification) have the most significant impact on their drinking choices.
Last, we'd like to identify the mixed signals students may receive. While the administration warns them of the sanctions they face if caught consuming alcohol, three liquor stores and two bars operate within two blocks of campus. If the university and the community are truly concerned about student drinking, city and university leaders ought to consider what kind of impact they can realistically expect to have, given the larger cultural message being sent to students about the drinking and college life.
University leadership is in the unenviable position of trying to balance the students' interests (if you can consider drinking an "interest") with those of the community. However, administration showed a blatant disregard for student opinion by ignoring the student senate's dissenting opinion and pushing through such a sweeping measure so quickly.
If the goal of the university is to achieve a high level of compliance to these new rules, then administrators should reconsider this heavy-handed approach. The ability of the new penalties to alter student behavior at the time of consumption remains dubious. The impact that the fines and classes will have on students' behavior after the fact is also questionable.
Finally, the university must realize that it's fighting an uphill battle against a deeply ingrained cultural norm that pairs the college experience with alcohol use.
We don't believe that students are idiots; rather, they are rational economic actors like anyone else. With knowledge of the new consequences, we expect that they will make decisions that they feel are in their own self-interest.
We only hope that they take into account the negative effects that their behavior imposes on the larger community, and how these behaviors have brought us the new regulations that we face today.
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