The Economics of Meal Plan Requirements in Higher Education

By Joshua Hall

college higher education; universities meal plans exploitation fixed costs variable costs

Many colleges and universities require full-time undergraduate students to purchase a full meal plan as long as they live on-campus. To students this can often feel like they are being exploited, especially given the high average meal cost of university dining plans and the lack of flexibility to scale back from a full buffet experience. Concerns about exploitation in this regard are similar to concerns about about company stores in coal mine towns, where coal miners often were forced to receive a portion of their pay in the form of script that could only be used at the company store. Price Fishback explored the economics of this in his classic article "Did Coal-Miners 'Owe Their Souls to the Company Store'?" (Journal of Economic HIstory, 1986). In that paper he suggests that competition among mines limited monopoly power. He also highlights that many companies owned stores due to the rural nature of the mines and the difficulty of attracting workers to an area where independent stores were unwilling to operate. The same economics seems to apply to meal plan (and dormitory residency requirements) at colleges and universities. The ones that seem to be most stringent in terms of requirements are those that are isolated geographically.

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