Too Little (Price) Discrimination can be a bad thing

I saw this article the other day in the LA Times reporting the the University of California is going to start charging a premium for some undergrad Engineering classes. They believe this makes sense because the affected majors have "higher than average" salaries. Since I'm a lapsed--or failed--Econ major, it piqued my curiosity.

Price Discrimination, for those of you who have a life, is the act of charging different prices for the same thing. This Wikipedia article gives a good introduction. I'm sure you can think of many examples, but airline fares are a common one. The same product--a seat on a plane--is sold by the airlines for vastly different prices. Producers can get away with this because they're able to segment the market into groups of consumers who are willing to pay the differing prices.

It seems to me if UC believes a little price discrimination is good, why shouldn't it apply this across majors? If Engineering degrees lead to a higher earning potential, shouldn't ones such as Education and Social Work be much cheaper, since graduates in them have lower than average earnings?

Links
LA Times - UC may hike tuition for some undergraduate majors
Washington Monthly - College for $99 a Month

Wikipedia - Price discrimination

http://thefilter.blogs.com/thefilter/2008/06/price-discrimin.html

Am I worse off because I didn't go to MIT?

There was a time in my youth when I was naive--and silly--enough to think I could go to MIT. I had no idea what I wanted to do when got there, but that's beside the point.

I ended up going to a public state school, flunking out, and then eventually graduating from a different public institution.

So what did I miss? Am I permanently locked out of the best opportunities available because I graduated from a "lower-tier" school?

If economists Alan Krueger and Stacey Dale are correct, it only matters that I graduated, not so much where from. In a Working Paper titled "Estimating the Payoff to Attending a More Selective College: An Application of Selection on Observables and Unobservables", available here, they suggest that students with a choice of going to an elite or lower-tier school end up just about the same regardless of where they go. You can find more details, including video, at the New York Times' Economix blog.

As for going to MIT, now just about anyone can do it online.