From Thanksgiving to New Years Day and the following weekend, the college football schedule is filled with bowl games.  After the New Year begins, college sports fans can turn their attention to the height of the college basketball season that culminates in the annual March Madness NCAA Division I tournament.  College athletics is big business although perhaps only ten to twenty Division I programs make money each year.

While many books have been written about sports including college sports, there are a few that I found interesting for their background about the origins of the modern college sports “game” and its current state of commercialization.   John Thelin’s  A History of American Higher Education is a fairly comprehensive book about the origins and development of America’s colleges and universities.  In a chapter entitled “Alma Mater,” Thelin outlines major developments during the 1890’s to 1920, a time period that he calls the “age of university building” and the “golden age of the college.”  During this period, going to college became “fashionable and prestigious” and the national media covered the daily life of a college student in the same manner that the lives of the rich and famous are covered today.  During that period, university colors and mascots were conceived and adopted and the role of alumni associations and fundraising became very important.

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On Monday, December 15, fifteen higher ed associations sent a letter to Congress asking that a portion of the Obama economic stimulus plan be allocated to higher education.  The letter indicates that 18 million Americans are attending higher education institutions, and since 18 million represents six percent of all Americans, a corresponding six percent of the allocation should go to higher ed.  The letter’s proposal is organized into three parts: Student Aid, Infrastructure Grants, and Additional Student Centered Recommendations.

This proposal correctly cites the number of Americans studying in higher education programs. However, the figure of 18 million includes a significant number of part-time, working adults (36% of all undergraduates and 61% of students at two year institutions), and historically, the part-time working adult cohort has been excluded or overlooked by many higher education lobbying efforts. Regrettably, this letter, although widely endorsed by a great number of reputable associations, is no exception.

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In 2003, Michael Silverstein and Neil Fiske published the book Trading Up: Why Consumers Want New Luxury Goods…And How Companies Create Them.  As partners at The Boston Consulting Group, Silverstein, Fiske (now the CEO of Eddie Bauer Holdings, Inc.) and others worked to research the consumer purchasing trends in the United States and overseas.  The phenomenon that they identified was the willingness of consumers to pay a premium for certain goods even in times of economic downturns.  Identified as “trading up,” the researchers also identified that consumers often “trade down” in order to afford the items for which they “trade up.”  In fact, they state that the effect of luxury brands in a market segment is to cause that category to polarize where the growth and profits move to the high and low ends of the spectrum while “companies caught in the middle struggle to succeed and survive.”  The authors provide a historical perspective that the trend to trade up has been around for centuries and that economists from Adam Smith to Thorstein Veblen to John Kenneth Galbraith have observed the trend of consumers to buy goods that cost more than what most others can afford to pay.

Silverstein and Fiske believe that the trading up phenomenon is positive and is driven by middle class consumers who are aware of the price/value ratio of what they are purchasing.  Furthermore, they state that so many middle class consumers are able to afford premium goods that the conventional wisdom of “higher price, lower volume” does not follow the trading up phenomenon.  Instead, the middle class consumers have a stronger emotional attachment with their luxury purchases than with other goods.  That emotional attachment is why they choose to ignore the mid-price product.  Silverstein and Fiske believe that the consumers have no desire to purchase a product that offers “neither a price advantage nor a functional or emotional benefit.”

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