Lower beer prices in the I-House pub

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We are a large group of current International House residents who are concerned about recent changes in the I-House pub’s pricing policy. Specifically, beer prices have increased to $6.50 per bottle/can over the summer. One may argue that prices were simply raised to what “comparable” establishments in the neighborhood charge and that the objective was to increase the surplus generated by the pub (or balance its budget). We believe, however, that this policy is misguided both from a long-term strategic and from a pragmatically economic point of view.

Let us first take the latter perspective: If the goal of the recent price hike was indeed to generate higher revenues to balance the pub’s budget, then we are very pessimistic about the policy’s success. Economically speaking, we are most likely on the “wrong” side of the revenue curve where any additional per-unit revenue generated by higher prices is more than outweighed by the drop in demand. This is not just a theoretical textbook argument. On the contrary, it has become a worrisome reality that the pub is nowadays quite deserted most nights. Please consider that most I-House residents are students on relatively tight budgets who appreciated the low prices of the past (a few years ago the pub still sold ‘Pabst Blue Ribbon’ for $2 per can). Now the pub has lost its competitive edge and residents either go to public bars or, what is worse, buy and consume their own cheap drinks in the isolation of their rooms (as drinking in the common areas of I-House is not allowed). If we want people to leave the comfort zone of their rooms and interact with their fellow residents, we need to make it more affordable to spend quality time in the pub.

This brings us to the second and, in our view, even more important argument: For residents, the pub is arguably the most important institution at I-House. It is where the spirit of I-House is most alive. It is where people of vastly different backgrounds meet and have a great time together in a relaxed, intimate, yet protected environment. If you ask Alumni about the most memorable part of their I-House experience, nights at the pub are usually on top of the list – even before Sunday Suppers, book events etc. We are worried that the recent price increases might kill this vital part of the I-House experience altogether.

We acknowledge that International House, despite being a non-profit organization, needs to watch its budget. Nevertheless, we think that, due to its critical role in fostering social interaction among residents, the pub should enjoy a certain priority, even if that makes it a deficit unit in terms of accounting. The contribution of the pub to I-House’s mission extends far beyond its contribution to the budget. Therefore, the price level in other bars is not the appropriate benchmark for “our” pub.

A possible first step in the right direction might be to keep the current selection of high quality, high price beers, but add a budget variety to the list. We are convinced that the returns in terms of higher participation and increased interaction among residents would be unambiguously positive.

We thank you very much for your kind consideration of our concerns and we are open to further suggestions about how to promote the I-House spirit – in the pub and elsewhere.

Sincerely,
I-House residents



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