Newsletter on Serial Pricing Issues 082 (May 16, 1993) URL = http://hegel.lib.ncsu.edu/stacks/serials/nspi/nspi-ns082 ISSN: 1046-3410 NEWSLETTER ON SERIALS PRICING ISSUES NO 82 -- May 16, 1993 Editor: Marcia Tuttle CONTENTS 82.1 SUBSCRIPTION RENEWAL PRICING, George Chressanthis 82.2 PERIODICAL CLAIMS, Rosann Bazirjian and Jo Ann Tesorio 82.3 _ANGEWANDTE CHEMIE_ CONCERNS, Kimberly Parker 82.4 FROM THE MAILBOX 82.1 SUBSCRIPTION RENEWAL PRICING - A RAZOR'S EDGE DILEMMA George A. Chressanthis, Associate Professor of Economics, Mississippi State University, gchressanthis@cobilan.msstate.edu The Newsletter dated May 9, 1993 (No. 81) featured an interesting and thought-provoking article concerning subscription renewal pricing (81.1). Understandably, librarians are seeking to have publishers set as early as possible "firm" prices for serials for the next calendar year. Librarians are looking at this issue from the standpoint of needing this information for budgeting purposes, decision-making with respect to whether to renew journals, possible financial risk reduction, and having time to react to price changes that do not appear to be justified given market conditions. All of these goals are well-intentioned and admirable. However, market signals are determined by the interaction between the ac- tions of BOTH participants in a market as affected by incentive and disin- centive conditions -- demanders (institutional and individual subscribers) and suppliers (publishers). The desire to have early "firm" prices may actually have an adverse price effect for libraries if publishers perceive the setting of early "firm" prices as increasing the risk of their finan- cial positions. Given differences in the elasticity of demand between in- stitutional and individual users, larger price increases will be more like- ly in the inelastic market (institutions). For foreign publishers, one element of such financial risk which is time- determined is exchange rate risk. The earlier librarians demand the setting of "firm" prices from the calendar year which these prices reflect, added risk and uncertainty may be perceived by publishers which in turn, like any other increase in the cost of production, will be factored into journal prices. Not exactly a prospect librarians have in mind. The question here of course is to determine whether changes in exchange rate risk significantly affect journal prices. An answer to this question may be forthcoming. My colleague (June D. Chressanthis, Assistant Professor and Serials Cataloger, Mitchell Memorial Library, MSU) and I have recently completed a research paper entitled, "The Effect of Exchange Rate Risk on Library Subscription Prices of Scholarly Journals." This paper grew out of a research grant funded by the Council on Library Resources, Cooperative Research Program, to determine factors which explain the existence and de- gree of third-degree price discrimination (institutional vs. individual pricing) of scholarly journals. Since this paper is currently under publi- cation review at a library science journal, we are somewhat constrained in how much can be said until we receive comments from the referees. However, the abstract of our paper is as follows: This paper provides regression-based empirical evidence on the effect of variations in exchange rate risk on library prices of the top-ranked 99 journals in economics. When modelling for the other known factors that impact journal prices, change in exchange rate risk from European pub- lishers accounts for about 3.7% of the mean library journal price from such publishers. In addition, variations in factors such as the publisher pricing practices for individual versus institution subscription, produc- tion costs, economies of scale, journal age, journal quality based upon various citation measures, and the non-profit motivations of publishers all impact library journal prices in a manner consistent with theoretical expectations. Policy implications from the findings are suggested for library administrators to pursue concerning the reduction of the negative economic consequences that increased exchange rate risk will have on maintaining a large research-oriented serials collection. (Individuals wanting a copy of this manuscript can contact me at the E-mail address given above.) Exchange rate risk is measured as the coefficient of variation (standard deviation divided by the mean) of the monthly exchange rate for the year in question defined in terms of the foreign currency per $1 (US) of the home country of a foreign publisher, and 0 otherwise for journals published in the United States. Three geographic locations were devised for the exchange rate risk measure: journals from Great Britain, Europe (excluding Great Britain), and elsewhere outside the US. Although the above paper investi- gates the impact of exchange rate risk as it pertains to economics jour- nals, the same approach could be applied to journals in other disciplines. The discipline-specific analysis allows for more effective statistical controls as well as taking advantage of published journal quality measures which can be used to help determine variations in journal prices. Bernard Naylor, from University of Southampton, England, and a recent con- tributor to this Newsletter on the Impact of Currency Fluctuations (77.3), said the following to me in a recent E-mail message about our research and its effect on libraries: One of the interesting things about your work, from my point of view, arises from the whole question of the impact of risk or uncertainty. You may have read the librarians are trying to press periodical publishers to give firm prices for their publications by (say) August 1993 for the calendar year 1994, instead of continuing the current practice of submit- ting supplementary invoices. I think on the whole we are right to do that and I have supported and indeed organised similar pressure in the UK. However, if the publishers believe that the net effect is to increase their financial vulnerability (risk or uncertainty factor), they may simply load an appropriate and higher price increase for certain in Aug- ust rather than keep a possible price increase up their sleeve for use on a rainy day the following June. And ultimately we will be no better off, or even worse off -- except that we will know for certain and at an ear- lier date how badly off we really are. I suppose there is a possibility that hard information in August may alter our level of confidence too, but whether this is likely to lead to more or fewer cancellations, will be interesting to see. Thus, it may be a question how much librarians are willing to pay for early "firm" prices. An economist colleague of mine once told me, "There are no solutions in life, only tradeoffs!" Economics also teaches us that there's no such thing as free lunch. The razor's edge dilemma for librarians is that maybe this issue of wanting early firm prices is just another example of economics in action. 82.2 PERIODICAL CLAIMS Rosann Bazirjian, Syracuse University, and Jo Ann Tenorio, University of Hawaii Press. >From Rosann Bazirjian, Syracuse University, LIBRVB@SUVM.SYR.EDU: In the no. 81, May 9th issue of the Newsletter, Dave Fisher discussed his frustrations concerning periodicals claiming. I would like to draw his attention to _Against the Grain_, vol. 5 (2) (April 1993) in which the "Group Therapy" column (which I edit) discusses his very same concerns. Both Diane Appleton, National Service Manager for Faxon, and Caroline B. Tucker, in charge of Promotions at the American Mathematical Society, pre- sent the vendor as well as publisher perspective concerning claim cycles for periodicals and serials. ----- >From Jo Ann Tenorio, Journals Manager, University of Hawaii Press, tenorio@uhunix.uhcc.Hawaii.Edu: I have just started to follow the _Newsletter on Serials Pricing Issues_ and would like to address the issue of periodical claims raised by Dave Fisher, UC San Diego (NSPI No. 81). We publish 12 journals and receive a number of claims each month from sub- scription agents on behalf of their customers. We respond to all claim requests promptly. However, we encounter the following problems frequently: 1) A claim comes in too early, before an issue can be delivered by 2nd or 3rd class mail to the subscriber. Libraries need to be aware of the publi- cation schedule, as unnecessary claims will slow down the entire claim process. In our response to the agent, we note the publication date of the issue and that US customers must allow 6 to 8 weeks for delivery after publication. We also let the agent know when the issue will be late. 2) Occasionally, we do not have a subscription recorded for the customer who is claiming an issue. In this case, we must request proof of payment. Frequently we do not receive a response to this request and, instead, the agent sends a Second and Third Claim. Sometimes our responses to the Second and Third Claims also go unanswered. Clearly, there is a communication problem here. We believe that we could quickly settle fulfillment problems if the customer would contact us di- rectly. We value our library and institutional customers and pride our- selves on providing excellent customer service. All claims sent to us di- rectly for issues not received will be answered and, if an issue has been damaged or lost in the mails, a replacement issue will be sent promptly. Perhaps other publishers who follow this Newsletter will want to comment on this. 82.3 _ANGEWANDTE CHEMIE_ CONCERNS Kimberly Parker, Sterling Chemistry Library, Yale University, Kimberly_Parker@QUICKMAIL.CIS.YALE.EDU. None of the 1993 issues for the _Angewandte Chemie_ (International edition in English, ISSN: 0570-0833) has arrived at the Yale Chemistry Library yet. According to our serials vendor for this title (Harrassowitz), we are not the only library in the United States which is suffering from this same lack. I understand that this situation is the result of VCH's Florida dis- tributor not receiving enough copies to redistribute. My first reaction to this situation was to inquire of Jane Maddox at Harrassowitz why we were receiving our issues from a Florida distributor when we were going through a German vendor to get a publication from a German publisher. Apparently, in 1987 VCH made a business arrangement with this Florida distribution agent that required any vendor (even one in Germany) serving a US library to work through Florida. This situation seems awkward at best, and the current debacle seems to display the worst of the situation. The Florida distribution agent (who will remain nameless since I don't know their name) didn't keep a record of the libraries who were not shipped their issues of Angewandte, *AND WERE WAITING FOR THE CLAIMS* to tell them who needed re- placement issues. Does something seem wrong with this picture? Why is VCH requiring Harrassowitz (and therefore me!) to deal with a non-responsive distribution agent when back before the distribution agent entered the picture, I was perfectly happy with the service I was receiving. By the way, the journal is now approaching $750 and surely that is enough money for a publisher to try to get its distribution avenues straightened up. [Message from Parker, dated May 12, 1993: "For the accuracy of my account, we have now received the first issue of 1993 (Jan.) of _Angewandte Chemie_ at my library. We are still awaiting the next 4 issues that would put us back on schedule." -ed.] 82.4 FROM THE MAILBOX The mailbox is: tuttle@gibbs.oit.unc.edu. >From Roel Tilly, University Library, Limburg, The Netherlands, R.Tilly@UB.RULIMBURG.NL: We at the University Library are trying to keep our journal collection up to a certain standard. In attempting this we face the problem of budgets which are stable but not indexed in accordance to price increases and cur- rency fluctuations. At the moment we are going te make a study of the ne- cessity in keeping up our _Excerpta Medica_ full set subscription. This is due to the fact that the price of this subscription is quite a burden to our budget. And we are not sure as to the amount of overlap this subscrip- tion has with other abstract journals, for instance, Medline and other CD- Rom abstracting services. If anyone has made a study of this problem or is planning to do so, we would appreciate suggestions or an exchange of opin- ions on the factors which we should consider in this study. ----- >From Mary Ellen Kenreich, Portland State University, KENREICH@gloom.lib.pdx.edu: In response to Keith Stetson's comment in NSPI 77.2 Fixed Exchange Rates. Our state higher education accounting office requires us to recalculate all foreign exchange rates if the foreign currency amount is listed on the invoice and the invoice total is over $50. If the difference is over $20 or 5% of the invoice, we are to pay the new calculated amount. We pay in US dollars. +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Statements of fact and opinion appearing in the _Newsletter on Serials Pricing Issues_ are made on the responsibility of the authors alone, and do not imply the endorsement of the editor, the editorial board, or the Uni- versity of North Carolina at Chapel Hill. +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Readers of the NEWSLETTER ON SERIALS PRICING ISSUES are encouraged to share the information in the newsletter by electronic or paper methods. We would appreciate credit if you quote from the newsletter. +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ The NEWSLETTER ON SERIALS PRICING ISSUES (ISSN: 1046-3410) is published by the editor through the Office of Information Technology at the University of North Carolina at Chapel Hill, as news is available. Editor: Marcia Tuttle, Internet: tuttle@gibbs.oit.unc.edu; Paper mail: Serials Department, CB #3938 Davis Library, University of North Carolina at Chapel Hill, Chapel Hill NC 27599-3938; Telephone: 919 962-1067; FAX: 919 962-0484. Editorial Board: Deana Astle (Clemson University), Jerry Curtis (Springer Verlag New York), Janet Fisher (MIT Press), Charles Hamaker (Louisiana State Universi- ty), Daniel Jones (University of Texas Health Science Center), James Mouw (University of Chicago), and Heather Steele (Blackwell's Periodicals Divi- sion). The Newsletter is available on the Internet Blackwell's CONNECT, and Readmore's ROSS. EBSCO customers may receive the Newsletter in paper for- mat. Back issues of the Newsletter are available electronically. To get a list of available issues send a message to LISTSERV@GIBBS.OIT.UNC.EDU say- ing INDEX PRICES. To retrieve a specific issue, the message should read: GET PRICES PRICES.xx (where "xx" is the number of the issue). 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