"This is a story about the law school market, a singular creature of American capitalism, one that is so durable it seems utterly impervious to change."

A big NYT article, in the Business section, by David Segal:

There are many reasons for this ever-climbing [tuition], but the most bizarre comes courtesy of the highly influential US News rankings. Part of the US News algorithm is a figure called expenditures per student, which is essentially the sum that a school spends on teacher salaries, libraries and other education expenses, divided by the number of students.

Though it accounts for just 9.75 percent of the algorithm, it gives law schools a strong incentive to keep prices high. Forget about looking for cost efficiencies. The more that law schools charge their students, and the more they spend to educate them, the better they fare in the US News rankings.

“I once joked with my dean that there is a certain amount of money that we could drag into the middle of the school’s quadrangle and burn,” said John F. Duffy, a George Washington School of Law professor, “and when the flames died down, we’d be a Top 10 school. As long as the point of the bonfire was to teach our students. Perhaps what we could teach them is the idiocy in the US News rankings.”

Much more at the link (with a big focus on New York Law School (which is not to be confused with New York University School of Law).

The product is a law school diploma. It's not hard to supply. But why all the demand... at such a high price? There's something quite insane about it, and U.S. News creates appearance of an orderly market in which potential buyers can see the value of the thing they will buy at such a high price. Those who bitch about U.S. News are in denial about the service it provides us, creating that appearance. [And by "us," I mean law professors.]