Friday, October 5, 2012

Transfer Pricing

Transfer Pricing is quite commonly found in the society today. The example most commonly used is taxation. The suggested Illinibucks have the potential to work in the same way, but could be based on very different criteria. One could be year in school of the student, a lottery system or distributed evenly amongst students. Such system is already used within the University on some levels. One might consider credits in the cafeteria a form of Illinibucks that one purchases at the beginning of the year. The purchase reflects a family's affluence and the preference of the student. Another form of Illinibucks that is already used is even being a part of an organization or a club. Everyone pays dues, or a flat tax per say and because of this, they can partake in events planned by the organization. Even our ability to enter the ARC and use the bus system can be classified as a transfer pricing system being in use.

If Illinibucks were to be implemented, one could probably use at all the places mentioned in others' posts such as the cafeteria, Mckinley, Krannert and any other facility owned by the University. The market could even develop where students would exchange these tokens with each other. For example Illinibucks might be exchanged when one student does homework for another.

Transfer pricing does affect the University setting if one views the University as a entity with many separate parts that need to interact with each other. A common system such as the Illinibucks may serve this purpose. The need for such a medium of interaction has already been somewhat addressed with people using credits at the cafeteria and I-cards with limitless Illinibucks per say to ride the bus. Nonetheless, more unity could be arranged between these University institutions to have them all use the same system, and who knows, maybe it even should be called Illinibucks.

1 comment:

  1. Taxes are not transfer prices. The two notions are entirely different.

    You mentioned use of the ARC and the Bus system as examples of transfer pricing. I'm not sure the are. If they are paid for out of student fees that are assessed and paid on condition of enrollment, then the are not transfer prices. Parking and meal plans are better examples of transfer prices since there is no obligation to purchase.