A General Econometric Model of the Determinants of Library Subscription Prices of Scholarly Journals: The Role of Exchange Rate Risk and Other Factors

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Abstract
This article provides regression-based empirical evidence of the effect of variations in exchange rate risk on 1985 library prices of the top-ranked ninety-nine journals in economics. When modeling for the other known factors that have an impact on journal prices, changes in exchange rate risk from continental European publishers account for about 3.7 percent of the mean library journal price from such publishers. In addition, econometric findings reveal that a $1.00 increase in individual journal prices results in a $1.29 increase in library journal prices, confirming that individuals do switch demands to the library as individual subscription rates rise, creating the effect known as the ''commons'' tragedy. Also, increases in library journal prices are associated with the existence of illustrations, number of pages printed, and journal quality based on a composite of various citation measures. Decreases in journal prices are related to increases in journal age, greater economies of scale as created by higher circulation, and the existence of nonprofit motivations of publishers. Moreover, standardized regression coefficient results reveal that the setting of individual journal prices is of the greatest relative importance to other factors in the model in determining variations in library journal prices, followed by journal age, total pages printed, and journal quality. Contrary to recent conclusions in the literature, changes in journal circulation are found to have a relatively less important impact in determining variations in library journal prices. Library administrators may wish to pursue policy implications from the empirical findings concerning the reduction of the negative economic consequences that increased exchange rate risk may have on maintaining a large research-oriented serials collection.

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