Brian Viard writes:
College applicants in the US often experience “sticker shock” when they discover the price of a university education. But one thing they do not have to worry about is how their major will affect the price. US universities generally charge the same tuition regardless of major. The same is not true in China. For example, at Renmin University here in Beijing, tuition for most majors is RMB 5,000 per year. However, if you major in a foreign language it will cost you RMB 6,000 and in art it will cost you RMB 10,000. At Central University of Finance and Economics, also located in Beijing, the price range is even greater. Annual tuition for most majors is RMB 5,000 but if you major in international trade or financial risk management it will cost you RMB 30,000.
Chinese universities are practicing what economists call “price discrimination”–charging different prices to different consumers. The price discrimination in this case is called “versioning” in which a menu of different products is offered at different prices. The versions are tailored to appeal to different consumers who choose the one they prefer most. In the context of Chinese universities majors are versions. Some courses are common to all majors but each major requires specific courses that distinguish it as a separate version.
