The market for textbooks: do economics professors practice what they preach?

Economics textbooks extol the virtues of competition. But the market for textbooks is anything but competitive. A professor typically requires students to buy a specific textbook. Even if that text is available from sellers such as amazon.com, students may not discover which books are required until the first day of classes, by which time it is too late to get the best on-line deals.

The US Higher Education Opportunity Act is trying to change that.

The act places new requirements on colleges, universities, and textbook publishers.

1. Colleges' and universities' online course schedule must list the required and recommended textbooks, along with the International Standard Book Number (ISBN).

This simple change will introduce much-needed competition into the retail market. University bookstores will have less ability exploit their market power and charge large mark-ups, since students can order books for less from on-line distributors before classes begin.  

Yet every silver lining has a cloud (or three).

Increased competition may force university bookstores out of business. If university bookstores have such high costs that they cannot break even selling books at a competitive price, maybe it's best that they get out of textbook retailing.The major downside that I can see for students is that it would be more costly for students to return texts if they decide to drop a course.

Perhaps without a guaranteed market, bookstores will no longer be able to stock sufficient quantities of all texts, and students will find that they are simply unable to acquire the required text. The truth is, university bookstores do not have guaranteed markets right now. In a class of 100 students, 10 might not buy a textbook at all, 30 might buy a used text from a friend, 20 might be organized enough to download the course outline in August and buy the text from amazon.com, and so on. It is an open question whether letting students know which textbooks are required ahead of time will increase or decrease that uncertainty.

Universities typically have revenue-sharing arrangements with their bookstores. If students buy books from www.abebooks.com, universities will face a loss of revenue. This is true. But it's not clear that textbooks sales are an efficient way of charging students for education. Unlike tuition, textbook purchases generate no tax credits for students, and only a portion of the markups students pay are retained by the university.

Of all of the requirements in the new HEOA, this first is the one that I would most like to see introduced in Canada. Sure, there would be some teething issues - universities would have to reprogram their on-line class schedules to include a link to required and recommended textbooks, recalcitrant professors would have to be pestered for textbook information. Because education is a provincial responsibility, each province would have to enact separate legislation. But it in my view it would deliver concrete benefits to students.

2. The US Higher Education Opportunities Act also requires universities to include information about textbook prices on their class schedule, specifically the retail price in the campus bookstores.

I have no problem with this requirement to the extent that it promotes competition in the retail market. My concern, however, is that students might choose their classes based on the textbook prices.

This is not a good strategy, partly because the price of a text in the university bookstore is not a good indication of the price a student will actually pay for the book. A text that is used year after year will typically have a thriving second-hand market. The actual cost of a text to a student is the price paid less any revenues received from selling the text at the end of the year. This cost may be a fraction of the retail price - or quite substantial, if a text is about to go into a new edition.

The other reason not to choose courses based on textbook prices is that the idea of a required text is becoming obsolete. Students rationally choose how much effort to put into a course, based on the marginal benefits (the expected increase in grade received*value of getting higher grades) and marginal costs (opportunity cost of time, direct financial costs). The diagram below illustrates: 
(that graph is hard to read, the horizontal axis says things like "write final exam" "do assignments" "go to class" "read textbook"). The marginal benefit of buying a textbook depends upon numerous factors - how closely the professor follows the text, the number of substitutes available, and the value that a student puts on getting higher grades - is the student trying to get into grad school, or just trying to pass? Now that students can readily find definitions - sometimes even accurate ones - on Wikipedia, and profs routinely post powerpoint presentations on their website, substitutes for textbooks are readily available, and the marginal benefit of buying a textbook has fallen.

Students often ask me "Prof, do I have to buy the text?" I find the question impossible to answer. Yes, students in the past have passed the course without having a copy of the text. But why would I have said that the textbook was required if I didn't think that, for an average student, the benefits of having a text outweigh the cost? But perhaps I'm not sensitive enough to my student's needs. A third provision in the HEOA attempts to harness professors' desires to do the right thing.

3. Publishers will be required to let professors know, in writing:

• the wholesale and retail price (or "net" and "list" price) of the textbook and any other materials
• If the textbook is available in other formats at a different price, for example, in paperback

A professor choosing a textbook is in much the same position as a doctor writing a prescription. There are many drugs that will do more or less the same thing. Some are more or less effective, some are more or less expensive. Would you want your doctor to write you a prescription for a less effective medicine just because it was cheaper? Would you as a doctor be prepared to do so? That's a hard choice to make.

And economics professors do practice what they preach: rational self-interest. I have been using the same textbook for my third year public finance courses for over ten years. I have a complete set of powerpoint slides which have taken hours and hours to develop and refine. If I switched texts, I would have to completely re-do the slides. And because switching texts would eliminate the thriving second-hand market, students could end up paying more. And for the course that I teach - policy-oriented public finance - there is only one Canadian textbook.

Indeed, the relatively small size of the Canadian market means that it is much harder to introduce competition via professorial choice. In many areas, there are just too few texts to choose from.

Once again, the parallel with medicine is instructive: fight monopoly with monopsony. Imagine if students paid "all materials inclusive" tuition fees. Instead of intermediate micro textbooks being sold directly to students, universities bought a stock of, say, 1000 intermediate micro textbooks, which students could use for a term at no cost if the textbook was returned in reasonable condition. It's not complicated: high schools do it. The textbooks would be replaced when they wore out or when they became outdated - not on the publishers' new-edition-every-three-years cycle. If universities were able to negotiate a bulk whole-sale price of say $100 per textbook and then use the texts for 10 terms, the cost would work out to $10 per student per term. 

Another thinking-outside-the-box approach is the British model. Professors list three or four different texts on the course outline, and outline the advantages and disadvantages of each one. The outline indicates the relevant chapters for each of the texts, and students can choose which one to buy. Now it does mean that students sometimes have to figure out more things on their own - one text might use the notation x1 and x2 while another uses the notation x and y. But students can make their own price-quantity trade-off.

4.The last provision of the HEOA that I find interesting relates publishers' practice of eliminating the second-hand textbook market by introducing new editions. Publishers are now required to tell professors, in writing:

• when the last three editions of the textbook were published
• A description of major differences or revisions between the current and previous editions of the textbook

This is a good idea, but the HEOA does not go far enough. The list of the major differences or revisions should be on available somewhere students can access it, such as the publishers' website. And I'm skeptical about how accurate these descriptions will be. I can imagine the publishers' description "examples in this chapter have been completely re-worked and updated" and the reality: the application “Why Everyone Loves Britney Spears”  on p. 272 in the 6th edition has been changed to “Why Everyone Loves Christina Aguilera” in the 7th.

I'm not sure what the future will hold. Even now there are texts such as David Friedman's price theory book available on-line. Prof. Ben Alarie at the University of Toronto law school has just launched the site http://www.taxwiki.ca/ which could be the starting-point for a free, electronic Canadian public policy textbook. But that's a topic for a future blog.

Comments

[Mike Moffatt]

The truth is, university bookstores do not have guaranteed markets right now. In a class of 100 students, 10 might not buy a textbook at all, 30 might buy a used text from a friend, 20 might be organized enough to download the course outline in August and buy the text from amazon.com, and so on.

Another area: In my second-year undergraduate micro course, the required textbook is Intermediate Micro by Varian (I use it because the other profs use it). It costs $161.25 at the UWO book store, so more than a few students have taken to downloading it off of Bittorrent and printing it at Kinkos. Why they decided to tell me this is still anybody's guess.

[Stephan Wehner]

How much in a Economics 101 text book of today was not in a text book of 30 years ago?

[Frances Woolley]

Stephan, hopefully Nick Rowe will join the conversation and answer your question as he teaches first year.

In intermediate micro, the course Mike Moffat refers to, there are probably enough changes in the subject matter to merit a new edition every ten to twenty years. Publishers put out a new edition every 3 to 4 years. The example I give in my post - where Christina Aguilera is changed to Britney Spears = is taken from the intermediate micro text Eaton, Eaton and Allen, p. 272 of the sixth or seventh edition.

But it would be entirely possible to teach intermediate micro with a 20 year old text book, supplemented with a couple of hand-outs on behavioural econ and game theory.

[Mike Moffatt]

Stephan: It depends on the text. The Cowen and Tabarrok text 'Modern Principles of Economics' from last year is a fair bit different than anything I've seen in the past. Other texts, less so.

I have a 9th edition of Samuelson's 'Economics' from 1973 and if you ignore the dated references and the silliness about the USSR overtaking the US economically, you could easily teach a near-complete 101 course with it today.

[Mike Moffatt]

... of course the course would necessarily have to be old-school style Keynesian.

[Rob]

I'd like to see the recent sales figures on textbooks.

Every major economics text is available online, and many students are now just downloading PDFs. I wonder how much it is biting into textbook sales. It seems to me that they might have more to fear than the CD industry, when a $200 textbook can be downloaded as a 2mb PDF file in less than a minute.

[Frances Woolley]

Rob, Mike -

The response of textbook publishers to downloading is to create new materials, e.g. on-line quizzes, interactive problem sets, etc. that students must pay to access on-line. If professors assign grades for completion of on-line quizzes, then student either pay up or lose the marks.

As I understand it some Ontario universities are taking the position (or have been told to take the position, I don't know) that professors are not allowed to require students to purchase such packages because they effectively amount to an unauthorized increase in tuition.

I have a couple of issues with this position.

First, the interactive on-line quizzes are often excellent value for money - much better value for money than a lot of textbooks, in that I think they really help students learn and they're fun.

Second, isn't a required textbook also effectively an increase in tuition fees? Or are universities tacitly acknowledging "sure, we say it's required, but it's not really."

Although actually as a professor I should be really scared by the development of on-line interactive quizzes - what's to stop the university from firing me and replacing me with someone far less trained who could just get up in front of the class, eloquently deliver the included-with-the-textbook ready-to-go powerpoint presentations, and press a couple of buttons to assign students an entire semester's worth of quizzes and tests? (that's a rhetorical question, the answer is tenure).

[Sriram]

I work at a Canadian University Bookstore (in IT), so this topic is of interest to me. the point about "introducing" competition at the Bookstore level is moot - substantial competition has been here for years. From the likes of Amazon & ABE el al, but also the photocopying of books is (the black market aspect of that is for another discussion).

IMO, where competition is lacking isn't at the retail level, it's at the publisher level (which you mention re: limited choice of titles). That also manifests itself as "edition inflation" (rapid replacement with new & marginally updated editions), but also packaging. ie. bundling books with materials (such as online access codes) with the intent to force students to buy the new package instead of a used book. The publishers are at war with the used book market (which hurts most bookstores too since most of us do sell used texts as well).

Instructors aren't helping, especially by adopting textbook packages instead of the book alone, and often requiring the online components that are used in these packages (ie. online tests/homework with automated grading) which do make their lives easier. However, in some cases students would have a real case in arguing that these things shouldn't be permitted at all since testing & grading is supposed to be covered by tuition. Requiring a student to pay extra to be tested & graded online may be in violation of some academic policies. At least (to me) it fails the smell test.

Remember, as you said, it's a broken market... the retailer doesn't get to decide what products they'll stock - the instructors do.

By the way: at our school we've been publishing class/textbook assignments online for years, including full information about the book (ISBN, New & used prices & stock, back-order quantity).

[Frances Woolley]

Sriram, yes, perhaps I should have said "enhanced competition" rather than "much-needed competition". I share your concerns about the bundling - that's a big enough topic for another blog post, but I don't know if what to air any more academic dirty laundry!

But how do you respond to Mike Moffatt's comment about Varian's intermediate micro costing $161 in the UWO bookstore when it's available from amazon.ca in paperback for $63?

[David]

I think the second requirement is good, especially if people choose their courses based on textbook price. First off, providing additional information (the textbook price in the course schedule, in this case) to a rational economic agent almost always improves efficiency. Students who place a high value on cheap textbook costs will be able to make better choices.

But more importantly, it creates more incentive for professors to select affordable textbooks (assuming it is in their best interests to maximize enrollment in their course). This is, of course, only the case if people in part make their course decisions based on textbook costs; otherwise, if students are indifferent to the costs of textbooks when choosing a course, posting the textbook cost should have no effect.

[Mike Moffatt]

But it would be entirely possible to teach intermediate micro with a 20 year old text book, supplemented with a couple of hand-outs on behavioural econ and game theory.

I don't even think you'd add any game theory. The only subject my course (well, former course - I'm not teaching it this year) has in it that wasn't in it when I was a student is two 1-hour lectures on behavioural econ. Otherwise it's the same course I took back in '96-'97.

As I understand it some Ontario universities are taking the position (or have been told to take the position, I don't know) that professors are not allowed to require students to purchase such packages because they effectively amount to an unauthorized increase in tuition.

I don't use any of the online materials that require log-ins for exactly this reason. I don't absolutely require students to purchase the textbook either, because it is a de facto increase in tuition and I don't think it's ethical. I keep a copy on 2 hour reserve at the library and students are free to use that. That's exactly what I did last year and one of my students used to go in for an hour every Tuesday and Thursday morning and use it. He said that not having a textbook actually helped him because it forced him to regularly schedule study periods when other students wouldn't use the book. If he owned the book, he could just study 'whenever' and probably keep putting it off. From a behavioural point of view, this makes a lot of sense to me. Plus he ended up getting the best mark in my class last year, so there might be something to it!

Although actually as a professor I should be really scared by the development of on-line interactive quizzes - what's to stop the university from firing me and replacing me with someone far less trained who could just get up in front of the class, eloquently deliver the included-with-the-textbook ready-to-go powerpoint presentations, and press a couple of buttons to assign students an entire semester's worth of quizzes and tests? (that's a rhetorical question, the answer is tenure).

Isn't this already happening at some level? Except profs aren't getting fired, they're just not be replaced with tenure-track hires when they retire. There's an army of lecturers who are working at 2-3 different schools. Combined it's more than a full load, but at each school they're considered part-timers and are at a p/t non-tenure track pay grade. Plus there's also guys like me who work in the private sector who pick up a course here and there as a hobby. The sad thing is that us p/t folks often rate better than the tenured faculty on student evals (though they're far from a perfect indicator of anything).

[Sriram]

There could be a lot of things going on here. I'll try not to air too much dirty laundry in the process ;)

a) Price differences between hard and soft covers are always huge. Pick any $9.99 paperback novel, the hardcover was probably around $30

b) International editions (ie. grey market). Publishers will market the same book at different prices to different countries. Sometimes (not always) there will be differences such as colour vs. B&W, paper & binding quality, etc. and the price difference is a reflection of that. Other times the pricing is more a reflection of the local market/customer ability to pay (ie. compare a Canada's market tolerance for a given price vs. India's), price controls, or the purchasing power of large buying groups. A seller can bring in cheap stock from overseas (probably in violation of some trade agreement, or CanCon-related industry protectionism) and undercut pricing of more by-the-book retailers (pun intended).

Not unlike how Americans sometimes import medications from Canada because local conditions (namely Medicare) give us better pricing.

c) Data feed errors. 'Textbooks' usually have much smaller markup than 'Tradebooks' (ie. most of what you see at Amazon/Chapters - pretty much everything else). The online sellers get data feeds from the major publishers of their catalogues - sometimes (more often than you think) there are errors in them & the textbooks being flagged as tradebooks is a common one, so the cost is under-reported. Amazon, Chapters, et al. then discounts from list price as they often do for their tradebooks and you get below-cost pricing on their sites. I know a few people who watch for this and alert the parties involved when it's noticed. A next-day price change occurs when the feed is corrected.

Lets take a look at this title (ISBN: 9780393934243/Hardcover)

From www.wwnorton.com $161.25 is the publisher's (US) list retail price, wholesale is $129(US). The eBook version retails at $80. There is no indication that a softcover is actually available for the North American market (so that cheap paperback is almost certainly an international edition).

Amazon.ca doesn't actually stock it - it's available from third-party sellers via Amazon.ca Marketplace. Currently $152+ Used, $196+ New (CDN).
Amazon.com has it for $125.53(US) ... That's below cost for the campus bookstores (though still double the $63 that was reported).
Chapters.ca lists it at $150 - but it's not in stock.
Various retailers on eBay are selling it between $125-$129USD (at or below wholesale cost).

Are companies like Amazon getting a large-volume discount price that a single campus store can't qualify for? Are they selling it as a loss-leader?

The only way I can figure how someone was selling a new copy of this book for $63 is that it's a grey-market import of an international edition.

[Sriram]

Mike, at my school the library reserve tactic used to be done on an ad-hoc process by individual profs like you did... now it's official policy & funded. Starting this term, every textbook ordered through the campus store is also being purchased by the library for their reserves (the quantity they keep depends on enrollment). I just got through writing the data feed from the Bookstore to the Library last week! :)

[Mike Moffatt]

That's excellent Sriram! In my case it was quite straight forward - the library already had a copy, so I just asked to have it moved to 2 hr. reserve.

[Neil]

As a student, the concept of a required textbook has always bothered me. I have generally felt that only about 1/4 of the required texts were actually required, in the sense that the course could not have been done without them. But I have never, ever, taken a class where the prof has come out and directly said that the text is optional. Why is that? Is it possible that you're all underestimating your teaching abilities? Or maybe just clinging to an expensive tradition.

Lately it's been less of an issue...the courses I still take these days are funded by my expense account. But over the years, I've probably picked up a couple thousand dollars worth of useless textbooks, that mostly can't be resold because new editions were released. (3 years seems optimistic...my observation is that most textbooks I've been assigned are 2 year cycles. Either there's no used market to buy from, or no used market to sell to.)

[Mike Moffatt]

"But I have never, ever, taken a class where the prof has come out and directly said that the text is optional. Why is that? Is it possible that you're all underestimating your teaching abilities? Or maybe just clinging to an expensive tradition."

Or it's against school policy to. One school I've been at it was a requirement that every class have a textbook (which could be as simple as a bound set of journal articles that students were required to buy at the bookstore). I'm sure there are a lot of schools like this.

A lot of 'things don't make sense' in academia have a bureaucratic explanation.

[Frances Woolley]

Sriram - the copy Varian's intermediate micro available from amazon.ca is indeed an international student edition, but is being sold directly by amazon, not a third party seller, so does not appear to be a grey market book.

ISBN:

# Paperback: 816 pages
# Publisher: W W Norton; 8th International student edition edition (Feb 15 2010)
# ISBN-10: 0393935337
# ISBN-13: 978-0393935332

It's also not in stock, so I suspect Norton is restricting the number of copies amazon.ca is able to get their hands on.

I wonder if it would be worth buying it from amazon.co.uk at 33 pounds and then paying to have it shipped internationally?

[Sriram]

Sriram - the copy Varian's intermediate micro available from amazon.ca is indeed an international student edition, but is being sold directly by amazon, not a third party seller, so does not appear to be a grey market book.

Frances - if Amazon is buying a product that was licensed for production & distribution in Market A (UK), and reselling them in Market B (Canada) instead, that would fit my understanding of the term "grey market", AKA "Parallel Importation". Unless if I'm misunderstanding something - my area is IT not publishing & distribution so that may well be the case.

I wonder if it would be worth buying it from amazon.co.uk at 33 pounds and then paying to have it shipped internationally?

I just added it to my shopping basket to see how much it would be. Standard shipping (1-2 weeks) from UK is about 7 pounds. Exchange rate is about 1.65, so a total of about $66cdn. Assuming that customs doesn't add anything.

[Jim Sentance]

""But I have never, ever, taken a class where the prof has come out and directly said that the text is optional. Why is that? Is it possible that you're all underestimating your teaching abilities? Or maybe just clinging to an expensive tradition."

Or it's against school policy to. One school I've been at it was a requirement that every class have a textbook (which could be as simple as a bound set of journal articles that students were required to buy at the bookstore). I'm sure there are a lot of schools like this."

It's been a while since I taught anywhere else, but I don't recall ever being told I had to have a text. In fact its more likely students who make it clear that they'd feel safer with a text (I've taught a fair number of courses over the years that are not 'textbook courses' and haven't used a text, often because there isn't one).

One of the first things I do in my courses is explain exactly what the relationship between the course material and the text is, and where the material they'll be tested on is coming from (text vs lectures). I'll usually give them my take on whether used copies are likely to be available, and whether an earlier edition (or another text) would do.

[Mike Moffatt]

"It's been a while since I taught anywhere else, but I don't recall ever being told I had to have a text."

I have, though not at my current school (UWO). I have no idea what the policy is there.

[Mike Moffatt]

Okay.. now I'm genuinely curious...

I first heard of the 'rule' that every course needed a required text (even in case's like Jim's course, where the 'text' was a bunch of journal articles bound together at the bookstore) was at my first teaching gig at Genesee Community College when I was 24. It made sense to me - at UWO as an undergrad I never had a course that didn't have a required text/set of journal articles that you had to purchase. But maybe I bought it because I was too young/naive to know any better (and held onto that belief today).

Does anyone know if this is a common thing?

As I mentioned, I have no idea what the policy is at UWO. In my Ivey course we have a text that the faculty all like, so we use that as part of our required reading. I also teach at Huron College (affiliated with UWO) and my stock answer to any question I get ask (what do you want for your textbook, are you going to have a midterm and a final, etc.) is always "What are they doing on main? .... Okay, I'll do that". So I really don't know. Hmmm.

[TGGP]

Greg Mankiw is an economist's economist:
http://gregmankiw.blogspot.com/2009/07/new-business-plan.html

[Just visiting from Macleans]

Next thing you know, there'll be a first year introductory course on "what is a newspaper, and how to read one".

[christine]

Second Jim's point that there's a lot of demand from students for a textbook. About a quarter of students in a recent course I taught said the thing they liked least about the course was not having a textbook (this was a course in which there wasn't really an appropriate text to use).

But what do students think 'required' means? Do they think that we'll check up on them and somehow penalise them if they haven't bought the book? I always thought it meant "most of the material we'll be covering in class - and on the exam! - is in this book, and it will probably help you if you have pretty regular access to that material, and don't come complaining to me if you didn't do well at the end of semester because you didn't bother to crack open the book even once." So if you could get the material by either (a) going to class (pretty much always); (b) using an older version of the text (always); or (c) going to the library and getting another text covering the same material (usually, but riskier), then you should feel free to go for it.

[Nick Rowe]

The big problem with the university textbook market is this: (some) profs assign a text without asking (or caring) what the price is. Because it's the student, not the prof, who pays that price. The prof is agent to the students' principal.

There are two reasons why profs ought to ask about the price, and take it into account when choosing a text:
1. Because the lower the price, the more students will actually buy the text.
2. Because it's the students' money the prof is spending.

I don't know of any cases where it's required for profs to have a required text. It's hard enough anyway to get students in Econ1000 to come to class and read the text. If we said the text wasn't required, even fewer would bother reading it.

From various weird committees I'm on at Carleton, I have learned that a big problem is that some profs won't tell the *university* bookstore what text they are assigning. Instead, they try to force the students to go all the way to some lefty bookstore off-campus to buy the book, because they want to promote that lefty bookstore. I have pushed to make it compulsory for profs to inform the University bookstore. If they want to inform others as well, that's fine.

As a prof and a textbook co-author, I have a conflict of interest, which makes it trickier. I try to ask the other profs (multi-section course, where we usually coordinate) to choose the text. And throw some royalties into a student bursary.

[Nick Rowe]

Stephan: "How much in a Economics 101 text book of today was not in a text book of 30 years ago?"

Short answer: "too much"! The original Samuelson and Lipsey texts were very short books, and then they just kept on growing and growing. I know why they grew: profs kept saying "I like this text, but it doesn't say much about the economics of X" (where X is some stupid pet topic of the prof). So the author adds a section on X, reasoning that if he does so then this prof will choose his text, and other profs won't care, since they can always skip X. Repeat for every prof, and the texts tripled in size.

That's one of the things I really liked about Mankiw's text - it was short. And why I broke my vow never to get into the "Canadian co-author" business.

The micro part of intro econ texts hasn't changed much in decades. Macro has.

The total cost of taking a full-year course is probably around $5,000 per student (fees, BIU's, opportunity cost of lost wages etc.). There is something to be said for choosing the best text, even if it's only a little bit better, and costs more. "Don't ruin the ship for a happenyworth of tar".

[Patrick]

"force the students to go ... off-campus to buy the book"

That really sucks! Don't the students complain?

When I was in uni I really hated was when the profs used the class to proof read or test his/her draft text. We'd get a bunch lousy photocopies of a draft quality text instead of a good book. And it was ALWAYS the profs who were the least effective teachers who did this. And it was always the upper level classes so there was only one section, so you couldn't sneak down the hall and sit in with a better prof. So we ended up in a hard class, with a lousy teacher, and no good text to fall back on. We'd end-up competing for whatever meager resources the library had. It drove me NUTS!

[Frances Woolley]

Nick -

Kudos to you for standing up for student rights with pushing for full disclosure of textbook information and also donating to student bursaries. I don't know if Carleton's undergrads know how much behind-the-scenes work you do on their behalf.

But "they try to force the students to go all the way to some lefty bookstore off-campus to buy the book, because they want to promote that lefty bookstore." Sure, that might be true of Octopus Books. But Haven Books is student owned and run, one block away from campus, and from what my students tell me usually charges less than the university bookstore.

[Jim Sentance]

Nick,

I agree on what's in the first year text. I've done a good bit of first year text reviewing, and one thing I almost always do is the opposite of what you suggest - I complain that there's way too much in the text.

[Mike McEwen]

What a ridiculous excuse for 'informed discussion'! So profs believe students will [and should?] choose their courses based on the cost differential of the textbooks? If a student is stupid enough to throw away $3,000 to $5,000 tuition in choosing a class to save $20 on a cheaper textbook, well then I can tell you right now that that student is going to flunk out by Christmas.
And just once, sometime, it'd be nice if these discussions about University textbooks actually suggested in passing that a book might just be worth every penny of its price in the University Bookstore. You know, like maybe the KNOWLEDGE has a value. And maybe someone somewhere might want to keep a text because of its mastery of the subject. Every one of these comments, from student and prof alike, dismisses the intrinsic value of knowledge. If this is the state of academia today I'm glad I got my degree when I did, because today's degree is toilet paper by comparison.

[Rob]

Now that's a silly rant. I guess Mankiw might as well charge $3000 per text, and everyone should be glad to pay it since the knowledge is worth every penny, right?

"And just once, sometime, it'd be nice if these discussions about University textbooks actually suggested in passing that a book might just be worth every penny of its price in the University Bookstore."

What exactly is you criteria for "worth every penny"? Is a book that retails for $60 on Amazon still worth every penny at $150 in the bookstore?

"Every one of these comments, from student and prof alike, dismisses the intrinsic value of knowledge."

That's simply false.

[Frances Woolley]

Mike McEwen - it's possible to value the life-enhancing qualities of modern pharmaceuticals and still believe that drug companies charge excessively high prices.

The same is true of textbooks.

[Mike McEwen]

Since none of the people posting here know the first thing about the economics of the Textbook industry or of the University Bookstore business, your comments are less than insightful. You seem to assume that books should be given away for next to free because you think they are currently too costly, but just maybe, Rob, if students paid $3000 for the text they'd actually value it, read it, and learn something. Textbooks carry just about the lowest margins of any retail item apart from groceries, but because someone somewhere is importing the crappy Indian edition and selling it in Canada [illegally without Canadian selling rights] then suddenly your University Bookstore is supposed to match that price and lose $90 a pop. I don't think so.
Nice try with the pharmaceuticals response Ms. Wooley, but if drug companies can't cover their research and development costs, and make a profit [GASP! that's a 6 letter word!], then they'll stop making those marvellous drugs and we'll all be screwed. Likewise with Textbooks; if the companies in the supply chain can't make appropriate profit then quality and availability will disappear and bridges will begin to collapse. [Well that's an Engineering text; for Economics nothing much bad would happen at all.]
Obviously Ms. Wooley isn't planning on writing a textbook, since she surely wouldn't want to be paid for her time, effort and expertise [such as it is].
As the commenter in the Globe & Mail said, this article is just so much "inanely inane inanity".
Goodnight.

[Rob]

lol

"if students paid $3000 for the text they'd actually value it, read it, and learn something"

They don't right now? Evidence please.

So the important thing is that we have a textbook industry and university bookstore industry? What happened to the intrinsic value of knowledge and mastery of a subject? I smell a rent seeker.

[Frances Woolley]

Mike McEwen -

Calculus works more or less the same way now as it did 20, 30 or 40 years ago. Why do students have to pay $150 for a new calculus text (that's the current price in the U of T bookstore) when a 10 or 20 year old text would do just as well? There's no need to compensate people for their effort in writing new textbooks if people just relax and don't bother with writing unnecessary textbooks in the first place!

And if you think that the price of drugs is driven by research and development costs, check out the price charged for the use of thalidimide as a cancer treatment - development and manufacturing costs=pennies a pill.

As Rob rightly points out, much of this is rent-seeking activity - which is why I would rather spend my time editing or writing Wikipedia entries or this blog - material that is available for free - than writing textbooks. And, yes, I have been asked to write textbooks a number of times.

[Nick Rowe]

Assume free entry into the market for textbooks, so that (economic) profits are zero, and margins are indeed razor-thin.

There are large fixed costs of creating a new textbook, and small marginal costs of printing each additional copy.

If textbook prices were "too high" (because, say, profs weren't paying much attention to price when choosing a text), in what ways would the resulting inefficiencies be manifest?

My mind says an excessive variety of texts (or too frequent updating of editions?) with too small print runs of each text. The equilibrium is too far up the downward-sloping ATC curve. Too few students buying the text. Maybe too much marketing effort too.

[Frances Woolley]

Nick, you put a question mark after too frequent updating? ;-)

[Neil]

@ Chrisine "But what do students think 'required' means?"

My interpretation of a required textbook is that there will be concepts or readings from the textbook that students are expected to be familiar with and will not be covered in class.
-or-
Some assignments or test questions come directly from the textbook, and students will need access to a copy in order to complete these parts of the course.

- If it simply includes the course material which is useful to have access to, but covered in class, it should be optional. I will never need to look at the book unless I miss class. The portion of students who learn best through reading can purchase it, but those of us who learn better through the lecture/note-taking process will derive no benefit.
- If it is used only for information, and not assignments, then it may be required, but an older edition will suffice. Please mention this in the course outline. Assignment questions are the most likely things to be updated in a new edition, so professors that use the book for their assignments actually require the current edition. Your students make their purchasing decisions on the first day of class, and do not know what kind of prof you are unless you tell them.
- If it is on reserve in the library, it may still be a required textbook, since a student may still need access to it. Both universities I have attended have required that textbooks be available on reserve, so it's assumed in my classes that you can borrow them briefly as needed. Again, useful information to tell your students in deciding whether to buy, or use the library, is whether you will be referencing the book during class. They do not know your teaching style yet.

When a prof just refers to "required text," it is assumed that students will require the text to successfully complete the course, and so pretty much everybody will dutifully go to the bookstore and buy it. I know that this assumption is more likely to be wrong than right, but I don't have enough information in the course outline to make a buying decision. In the end, I'm better to waste $160 on a text I don't use than fail a $650 course because I didn't buy the text, so the default position is to buy it.

[Susan]

Canadian students now an alternative to buying expensive textbooks. They can rent what they need at bigmama.ca

[Sriram]

@Susan: actually, rentals is increasingly becoming an option at university stores too. I know of a few in Canada that are doing this, or planning too this fall.

@Neil: at our store, profs can adopt a book & give it a choice of flagging them as required, recommended, optional, or alternate. But my feeling is tha majority just say 'required' all the time even if it should just be 'recommended' based on in-class useage.

To the profs here: what are your feelings on coursepacks? In theory, they should provide inexpensive alternatives to a full textbook, but copyright clearance fees are set so high that the resulting coursepacks are often not that much cheaper than a regular text. Plus they usually have little value in the resale/used market (mostly because they get changed even more often than textbooks - every term is not that uncommon - and there are no institutional buyers of used stock, plus they simply don't last as long physically vs. a factory-made book).

Unless if you create a coursepack made completely of public domain work, or work for which the copyright holder has waived payment requirements... that would make them dirt cheap.

Maybe you should author a textbook & release it to the public domain as an ebook!

[David Friedman]

I just wanted to note that, in addition to Price Theory, several of my other books are also available, for free, on my web page. They include Law's Order, The Machinery of Freedom, Future Imperfect and (irrelevant to this discussion) my published novel Harald and my unpublished novel Salamander.

I write books primarily as a way of spreading ideas, not a source of income, so web them whenever I can get my publisher's permission to do so.