I always thought that the liberal arts majors subsidized the more expensive STEM majors, but your comment made me question that. So I took a look at my Alma Mater's financial statements and it turns out that the subsidy is less that I thought, but still significant. Facilities are a pretty small part of the university budget, dorms turn enough profit to cover utilities and maintenance. Most of the upfront cost of academic buildings is paid for by donors (may not be the case everywhere). 60% of the University expenses are salaries and about 20% of the staff are faculty. However the majority of the employees work in revenue-generating parts of the university. Room and board mostly covers the salaries for low-wage positions like food service, security, building maintenance. Athletic revenue mostly covers the cost of coaches and athletic staff. So the remaining number of non-revenue generating administrators (bursar, registrar, etc.) is about equal to the number of faculty. Since STEM faculty are generally paid more that liberal arts, I would estimate the cost premium of operating a STEM class over a liberal arts class to 10% at this particular school (NE USA, Private, D1).

It sounds like you basically dropped all other costs but teacher salary and found STEM professor salaries to be 10% higher

(Facilities dropped, same cost per student on dorms + maintenance, building capex dropped)

You really need to do a per-student cost analysis - e.g. if there are 500 STEM graduates and 2000 liberal arts, the costs are not evenly spread across the non-academic staff, and you need to account for the separate facility costs (e.g. a computer/science lab is much more expensive to maintain and stock than an english classroom)

And There are also lots of intangibles to factor in -

-How many of the alumni contributing to the endowment and paying for academic buildings are STEM vs. liberal arts graduates

-How do graduation rates and job outcomes differ between STEM vs. liberal arts, and affect the college's KPIs (e.g. 95% graduate on time and 80% get a job within 6 months making a median $70k, for marketing)

Also presumably your school has an endowment and investment managers, which is the largest source of revenue for top tier schools (Yale's endowment of $27.2B returned 12.3% in 2018, the school spent $1.4B of that return on operating costs making up 34% of the university's net revenues [0])

So really in the grand scheme of things, most major universities are safe investment vehicles that are (1) extremely marketable to wealthy alumni (2) have great information networks and (3) generally enjoy major appreciation on their real estate value, making the comparison of STEM vs. liberal arts salaries pretty negligible

[0] https://news.yale.edu/2018/10/01/investment-return-123-bring...

The price you sell things for is more about what people can pay than what they cost to produce. If jet propulsion majors easily get huge loans, and English majors only get tiny ones, then the university will easily find a way to charge them different fees.

Also, the poetry class is certainly taught by an adjunct.

Supply and demand isn’t related to “cost”, only the price the market will bare.

> Supply and demand isn’t related to “cost”

Demand isn't related to cost, but supply certainly is. Lower costs mean greater quantity supplied at any price level.

“The portion of the marginal cost curve above its intersection with the average variable cost curve is the supply curve for a firm operating in a perfectly competitive market (the portion of the MC curve below its intersection with the AVC curve is not part of the supply curve because a firm would not operate at a price below the shutdown point).”

https://en.m.wikipedia.org/wiki/Marginal_cost#Perfectly_comp...

Only in a perfectly competitive market, which, as you'll note, is the problem here - there's too much distortion around student fees (demand) to truly call the college market perfectly competitive.

I would damn well hope there's lab units for such classes, otherwise one couldn't take it very seriously.

like a cooking class with no kitchen time and no food prep or tasting...

Or a English major without writing for other people to read...

> Even the course instructors are likely to have comparable salaries

Why is this? Isn't there a glut of qualified liberal arts post-grads and post-docs, compared to engineering?

I wonder why many budget schools don’t simply throw out lab work and emphasize a rigorous mathematical approach. Whoever graduates from these places would (in my opinion) likely be more competitive and useful for graduate programs anyway