The $250 Econ 101 Textbook – Craig Richardson – WSJ – Jan 2015

The $250 Econ 101 Textbook – Craig Richardson – WSJ – Jan 2015

http://www.wsj.com/articles/craig-richardson-the-250-econ-101-textbook-1421192341

 

The $250 Econ 101 Textbook

We economics professors are missing a chance to teach a cardinal lesson about the unchecked rise of prices.

I’ve been teaching economics for 25 years, and yet I’ve routinely missed a perfect opportunity to explain how markets fail to deliver efficient solutions. It isn’t just me. During our first day of class in introductory economics, thousands of economics professors begin with a key lesson: how to make better decisions by carefully weighing benefits and costs. Yet we professors are shockingly blind about what our students pay for the textbooks from which we teach these valuable lessons. Even on Amazon, the average price of a new copy of one of the best-selling economics textbooks, “Principles of Economics” by Greg Mankiw, can be more than $250 (and retail for a hardcover edition is about $360).

Think about it: For a student working at minimum wage, it would take him about 35 hours of work after taxes to afford this book. Not to pick on Mr. Mankiw, since he has written a fine book, but $250 for a new textbook? Really?

ENLARGE
Photo: Getty Images

In 1982 I took principles of economics for the first time and I believe I paid about $20 for a wonderful textbook by Richard Lipsey and Peter Steiner, “Economics.” Minimum wage was $3.35 then so it took about six hours of work for me to pay for the book, which I did with cash earned over the summer. (The textbooks haven’t changed all that much, by the way.)

So what is going on? Since 1985, prices of all consumer goods have about doubled, but textbook prices have risen sixfold, according to the Bureau of Labor Statistics. The reason is such an interesting one that it’s surprising it doesn’t find its way into the first chapter of every economics textbook. The cardinal lesson is that prices rise unchecked if the people who order the goods aren’t paying the prices.


Economics Professors decide on ways to achieve the level of engagement they expect from their Students. High Level > and options > personal local examples

[Grade C]

The cardinal lesson is that textbook prices rise unchecked if the people who order the goods aren’t paying the prices.

[Grade A]

The cardinal lesson is that textbook prices rise unchecked if the people who order the goods aren’t paying the prices. And now, let’s read the complete story and discuss the GAO Report to Congress on College Textbooks _ http://www.gao.gov/new.items/d05806.pdf _


Publishers routinely hide the suggested retail prices of their textbooks from the book cover and most of us never bother to ask what they cost. After all, we’re not paying for them, right? Instead, we’re swayed by the publisher offering us free examination copies, PowerPoints, lecture notes, quiz generators and so forth. Instead of engaging in cost-benefit analysis, we only pay attention to the benefits to us before ordering the outrageously expensive books that we ask our students to pay for.

There’s more to this story. During the past 30 years, there has been an explosion of student-loan debt. Students rarely pay for books out of pocket and instead roll it into their financial-aid package. So a $250 textbook is now being paid back over decades. It’s a bit like the prospective car owner who pays $400 for optional floor mats when it only adds a few dollars to her monthly payment, yet would never pay cash out of pocket for the same mats. The easy access to financial aid has meant there is no natural binding mechanism on price increases, since the pain of rapidly rising prices is scarcely felt by years of student-loan payments.

So here is the $250 economics textbook, a creature of government-subsidized student loans, professors who pay no attention to prices, and students who strive to push the costs down the road. It seems like a natural end of chapter one question, doesn’t it?

Mr. Richardson is a professor of economics at Winston-Salem State University in North Carolina.

 

=========================================================

There are 168 comments.
Oldest
Roger Kolvoord
Roger Kolvoord Jan 13, 2015 – Gee, according to your example the price of textbooks has increased by more than 12-fold. Maybe the BLS is lying to you too?

Dudie Katani
Dudie Katani Jan 13, 2015 – bottom line the students are stupid and if all of them refused to buy the book things would change… besides , what self respecting professor would not want to rip off the sutdents to make the money and commisions from the sale. There is a conflict of interest when the book required for a course is the one one written by the professor.

ALAN SEWELL
ALAN SEWELL Jan 13, 2015 – This may be an economics case study of how an oligarchy controls markets in order to stifle competition and raise prices to extortionate levels. How many publishers market textbooks to colleges? Could it be as few as two or three who have the marketing reach to influence academia to certify and purchase their texts? Based on pricing, this market doesn’t seem to be driven by robust competition.
At any rate, electronic publishing should soon begin to constrain the price of textbooks as it eliminates much of the costs of printing a physical book and maintaining it in a physical inventory. I can’t imagine there’ll be any physical books seen on campus in three years, so perhaps the cost will start to go down when the students carry their books in Ipads and Iphones instead of backpacks.

CHRIS STINNETT
CHRIS STINNETT Jan 13, 2015 – @ALAN SEWELL I hope you’re right. When I taught, I shopped for the cheapest textbook I could find for the students–they wouldn’t let me fly with my own lecture notes (accreditation fears). The price of all e-books is still too high in my opinion; even at 50% of list there are huge profits to be made and much higher royalties paid to authors. What will likely happen with e-texts is a relatively high price, followed by an expiration date on which the book simply vanishes into the ether, like a library loan. If the student wants the text for future reference, he’ll get to buy it again. There is really no depth to the greed and perfidy of the publishers.

ESTELLE BRENNAN
ESTELLE BRENNAN Jan 13, 2015 – @ALAN SEWELL The price for eBooks is not discounted relative to hard copies, despite the fact that the manufacturing and distribution costs are significantly lower. The same dynamic exists with non-textbook eBooks. The publishers decline to price the eBooks lower because it would reduce their total revenue.

Sy Corenson
Sy Corenson Jan 13, 2015 – The cost-benefit is even simpler. Either pay the high price or get a low grade. Since a high GPA is worth many thousands, an investment of only $250 is a bargain.

THOMAS CAMPBELL
THOMAS CAMPBELL Jan 13, 2015 – @Sy Corenson Baloney.
Macrena Sailor
Macrena Sailor Jan 14, 2015

@Sy Corenson
So, which text book publisher do you work for or, are you one of the professors who love to write and profit from the text books?

THOMAS CAMPBELL
THOMAS CAMPBELL Jan 13, 2015 – I call it the “Textbook Mafia.”
The most appropriate Econ 101 textbook is without a doubt Thomas Sowell’s “Basic Economics.” The price is right; there are no equations, few if any graphs, and some tables.
Both our kids figured out the textbook thing their freshman years. 1. Profs had no idea what their books cost; 2. Too often profs “required” a huge, expensive tome and proceeded to use little if any material from it; 3. Often groups of kids would buy and share one copy, if that were the cheaper way; 4 Otherwise they would buy earlier editions online for a fraction of the price of the current one.

These elevated, unnecessary extraordinarily expensive tomes are a conspiracy between publishing houses and the profs lucky enough to have fallen onto good sales. It becomes a revision machine, the books’ growing ever larger with every nice idea that some reviewer or colleague suggests might add value. Seldom is that the case, as the time available to present the material doesn’t increase. In most fields, neither does the material appropriate for undergraduate study change that much in the intervals between revisions.

Richard Tauchar
Richard Tauchar Jan 14, 2015

@THOMAS CAMPBELL

Great commentary.

 

Daryl Reece
Daryl Reece Jan 14, 2015

@THOMAS CAMPBELL That reminds me, there was a Supreme Court case that revolved around this kid who figured out he could buy the same textbooks in Thailand and import them to the US for resale at a much lower price to his peers. The publishers claimed he was violating the Copyright laws and sued. Some idiot lower court actually sided with the publishers before the Supremes reversed them.

BTW, I thought the Internet was going to kill paperbooks. When is that happening?

 

XAVIER L SIMON
XAVIER L SIMON Jan 13, 2015

The economics professors need to set aside the narcissism that makes them believe that they each have to write and publish their own textbook, which is why circulation of any on them is so low and prices are so high.

Guys, nobody reads your textbooks and students can learn from any book already out there. Yours is not better. Give it up.

 

Karen Sherman
Karen Sherman Jan 13, 2015

My husband is an English Professor, one of the books he wanted to use was $190 NEW. The bookstore said they cheapest they could get it USED was $80. He found copies on Amazon for under $10 which he purchased for his student’s use. Electronic isn’t much better…my son’s electronic economics book was $160!
David Jones
David Jones Jan 13, 2015

Without disputing anything else the professor says on this subject, exactly how does

“the $250 economics textbook, a creature of government-subsidized student loans, professors who pay no attention to prices, and students who strive to push the costs down the road” equate to “a perfect opportunity to explain how markets fail to deliver efficient solutions”? What does the market have to do with government subsidies, a missing price incentive and captive buyers?

 

Richard Tauchar
Richard Tauchar Jan 14, 2015

@David Jones
Exactly!
David Cole
David Cole Jan 14, 2015

@David Jones “…what does the market have to do with government subsidies, a missing price incentive and captive buyers?”
Little to nothing, given the Feds intervention and takeover of education financing. Professors, if they had the latitude to specify which books / material their students had to have, could insert a price incentive by specifying a minimum version of the textbook that meets course requirements and let the students figure out where to buy the books.
It took my son about a semester to discover the wonders of buying and renting used books on Chubb.com and similar sites.

 

Marc Williams
Marc Williams Jan 13, 2015

In my view, the real point here is the pricing distortions that take place whenever government subsidies, implicit or not, are in play. My son is in his first year of college and I wish every day government would get out of subsidizing college tuition so market pricing could truly take effect. Tuition rates and book prices would drop through the floor overnight as a result, after which I could actually afford to send him to college without having to sacrifice our retirement.

 

Norm Astwood
Norm Astwood Jan 13, 2015

It is not the Warrens or Obamas that will make it a $10 Econ E Book.
George Hagedorn
George Hagedorn Jan 13, 2015

In 1981 I first taught from the 2nd edition of a particular textbook. It was excellent. Over the years I then taught from the 3rd, 4th, 5th, 6th, 7th, 8th and 9th editions. Each edition was more expensive and made less sense than the previous edition. The 9th edition was so bad that the department adopted a different book after that. That new book started in its first edition, but is now in its second edition…
Based on this and several other experiences, I’ve told many students, “There is a special place in Hell for the textbook publishers.”

 

William Burbage
William Burbage Jan 13, 2015

If Economic students studied nothing but Adam Smith’s “An Inquiry Into the Nature and Causes of: The Wealth of Nations,” they would know more about economics than anybody who has only an undergraduate degree in economics.
Sue Abercrombie
Sue Abercrombie Jan 13, 2015

The tuition costs at <pick your favorite> university have also risen faster and farther than inflation over whatever interval you choose. That’s a bigger hit than textbooks. Both are beyond unreasonable!
I was subjected, decades ago, to some unreasonable textbook prices a few times. I took an undergraduate biology course in 1966, for which the full set of textbooks cost me $86. That doesn’t sound so big these days, but it was nearly 50 years ago. I think I still have the two heaviest tomes somewhere. They were “Bacterial and Mycotic Infections of Man” and “Viral and Rickettsial Infections of Man.” Not only did I have difficulty affording them — I had trouble simply carrying them.
The greatest offense was professors requiring textbooks they wrote. A particularly venal practice was changing the exercises and problems in each subsequent edition (but much else) and requiring students to do and turn in the answers.

 

XAVIER L SIMON
XAVIER L SIMON Jan 13, 2015

“So here is the $250 economics textbook, a creature of government-subsidized student loans, professors who pay no attention to prices, and students who strive to push the costs down the road.”
That’s is part of the problem but the professor doesn’t get the real reason for why economics textbooks are so expensive is that too many professors write their own texts so the circulation ends up being very limited. Apparently this professor hasn’t written one, thank God.

But I’ll agree that another major reason is that there is so much government money available at the expense of the poor students who will then be saddled with too much debt.

If Fauxhontas Warren really cared about the students as she claims, she would try to see if there are ways of getting the government money out of the system, push colleges and textbook operators to really compete, not just sit back and be showered with government money.

 

David Cole
David Cole Jan 14, 2015

@XAVIER L SIMON I hear ya, but the chances of seeing Fauxchahontas rail against textbook publishers is as likely as seeing Al Sharpton / Jesse Jackson / (you get the point) in the hood talking about inner city violence and the homicide rate, or OJ finally catching them killers.
XAVIER L SIMON
XAVIER L SIMON Jan 13, 2015

Too much government money in the system is the problem. Period.

 

Joe Cobb
Joe Cobb Jan 13, 2015

A superior book costs $15.98 plus shipping from Amazon – you can assign “Basic Economics” by Thomas Sowell. No graphs nor equations. You professors can put those on the whiteboard; Sowell will better explain the economic concepts, which you can then demonstrate to your students how to write in “algebra language” (similar to ancient Greek, which students had to learn last century). Before I retired in 2006, we used this in my MBA classes at Condordia University Irvine. Great book.

 

Krista Gifford
Krista Gifford Jan 13, 2015

“I’ve been teaching economics for 25 years, and yet I’ve routinely missed a perfect opportunity to explain how markets fail to deliver efficient solutions. ”
And then you go on to tell us how government subsidies and student loans cause prices to rise? Really? How exactly is government interference in the market – a failure of free markets? It is the government that is failing. And if you fail to teach your students how the government is destroying their economic prospects then you are truly doing a disservice to your students. Free markets drive prices down and quality up. Every time. Everything related to education today is wholly distorted by government interference so prices rise and quality – well I will leave that up to others to decide. Please, do everyone a favor and at least tell your students that it is government that is driving their prices up – NOT the free market.
David Cole
David Cole Jan 14, 2015

@Krista Gifford Or treat it as a case study on subsidies. If they couldn’t afford the class, they wouldn’t have to buy the book.
http://ingrimayne.com/econ/Efficiency/EfficiencyMark2.html
An alternative case study is evaluating the total cost of ownership when buying a new car. You might be able to pay the monthly note for a new Mercedes, but if you can’t afford the maintenance, insurance, tires, etc. you won’t be driving it for long.

 

judy smith
judy smith Jan 13, 2015

Good grief, how on earth could a person with enough brains to be a college prof — especially an econ prof — NOT be aware of a textbook price? You must be a real prize, Mr. Richardson. Also, I think you’re wrong about student loans being a key factor. I went to college before loans were big on the scene and even then, some textbooks cost so much it literally hurt. The guilt lies with faculty who are on the take from publishers, in my opinion.

 

David Cole
David Cole Jan 14, 2015

@judy smith “…the guilt lies with faculty who are on the take from publishers”
I’ll take “Incentives and rational economic behavior” for $200, Alex.

 

James B Shaffer
James B Shaffer Jan 13, 2015

You should also teach the economics of student loans from the Government.

 

David Cole
David Cole Jan 14, 2015

@James B Shaffer If Moochelle can push the FDA to tell us all of the evil things in our food, why can’t Fauxchahontas push the CFPB to push similar information to students every semester as a prerequisite for receiving Federal aid?

 

Bill Jackson
Bill Jackson Jan 13, 2015

So the proof is in the pudding so to speak.
I challenge you to build your course around a $20 textbook for next semester. If more people did that the cost of the textbooks would fall through the floor, as they should.

 

 

KEVIN BURNS
KEVIN BURNS Jan 13, 2015

@Bill Jackson
The $20 textbook was back in 1982. Due to inflation double that for a fair challenge.
Your concept is good.

 

Joel O’Bryan
Joel O’Bryan Jan 13, 2015

The syllabus that calls for the student to buy a $250+ textbook should come with a notice of micro-aggression due to the sticker shock, and a preceding “trigger warning” of impending rage at how much a tenured Prof gets for so little work.

 

Richard Tauchar
Richard Tauchar Jan 13, 2015

I would hope and guess that most students would buy used textbooks whenever possible. Trouble is, the d#mn book companies and professor authors keep publishing superfluous new versions every couple of years to make money off their captive consumers.

 

David Cole
David Cole Jan 14, 2015

@Richard Tauchar Imagine the poor schlub taking the econ class at Chicago, Wharton, etc. where the professor teaching the class wrote the textbook in question 🙂

 

David Jebens
David Jebens Jan 14, 2015

The marginal cost of purchasing a $250 textbook is small compared to the marginal benefit of being able to complete a several thousand dollar class. 🙂
On the bright side, many texts are now available on Amazon for rent.

 

JAY WRIGHT
JAY WRIGHT Jan 14, 2015

Since Obama is pushing for “loan forgiveness”, these textbooks are essentially free to the student and the cost is shifted to the taxpayer. Sort of reminds me of our healthcare system–the taxpayer ends up paying for most of the cost.

 

David Cole
David Cole Jan 14, 2015

@JAY WRIGHT Except you can’t resell your kidney on Chubb.com or eBay, for that matter.

 

JAY WRIGHT
JAY WRIGHT Jan 14, 2015

@David Cole @JAY WRIGHT
Given the emerging costs of the ACA, you might have to sell a kidney on eBay in order to cover your monthly premiums.

 

Stephen Brosseau
Stephen Brosseau Jan 14, 2015

“I’ve been teaching economics for 25 years, and yet I’ve routinely missed a perfect opportunity to explain how markets fail to deliver efficient solutions.”

What market? An essential element of a free market is voluntary transactions. Coercing students to buy absurdly over-priced books has nothing in common with a free market.

Shame on every professor who shirks their responsibility to find cost-effective materials and course texts for their students.

 

Sam Thomsen
Sam Thomsen Jan 14, 2015

@Stephen Brosseau Good point. He didn’t actually say “free markets.” His is obviously a description of a rigged market – rigged to benefit those with power. Maybe that was his point, but he doesn’t make that very clear.

 

William Allen
William Allen Jan 14, 2015

This enormous market distortion presents a huge opportunity for disruption. Technology, especially the internet, has already begun to disrupt this cartel of professors and publishers. With each passing year, you will read more and more examples of students being educated by low cost, high quality content that will gradually eliminate exorbitantly priced text books.

 

Slav Rohlev
Slav Rohlev Jan 14, 2015

China to the rescue!
Almost every popular, ridiculously over-priced, textbook is available for a small fraction of the cost (like about $25) from some printer in Asia. Ask around.
The paper is thin, the binding is not as good, and of course it breaks every single copyright law – but it saved me hundreds of dollars every semester.
Best part, it was a nice little F.U. from the students to the publishers.

 

David Cole
David Cole Jan 14, 2015

@Slav Rohlev Yep, Foshan University’s econ program is small, but up and coming 🙂

 

Vicki Edem
Vicki Edem Jan 14, 2015

This is one of the reasons one of Cedarville University’s professors wrote an online introductory textbook available for free to users. Coming from a Christ-centered university, this text does integrate a Biblical worldview, but provides solid introductory economics from a free market perspective to students with free online registration.

christianeconbook.com

 

David Cole
David Cole Jan 14, 2015

Professors could help break the cycle by not requiring students to purchase the very latest revision of the textbook; you know, the one the author revised last year and the year before that. The 56th revision of Mr. Mankiw’s textbook probably has a different cover, but little else.

Maybe it’s time for the professor to try an experiment to test his market theory out? I’m sure his students will willingly participate.

 

PETER HOLM
PETER HOLM Jan 14, 2015

@David Cole

If the prof is still learning the fundamentals himself then maybe it’s best to choose another prof.

 

Henry Lyczak
Henry Lyczak Jan 14, 2015

What this article describes is not failure of the “market”, but is the entitlement mentality with no accountability by the provider. The “market” is the for profit education industry that our Educator in Chief wants to regulate out of existence.

The economic lesson missed is, though it may take a while to realize it, a “free” entitlement will eventually be paid for, by you.

 

Wade Johnson
Wade Johnson Jan 14, 2015

Main culprit to textbook cost is that publishers and authors collaborate to issue a “new” edition every couple of years and the Professor’s class syllabus requires the new edition.

The new edition is virtually identical to the previous edition except for some “new” mistakes in the “new” edition along with the the old mistakes that haven’t been corrected.

Professors that gave a rat’s keister about their students could allow students to use the previous edition which they can rent from a book recycler for a few dollars. The Prof. just has to get off his behind and make note of any of the very few changes in the supposed “new” edition.

I’m a retired university prof. and did just that.

Oh, and the classic textbooks such as Thomas’ “Analytic Geometry and Calculus” in the 1950’s remained unchanged for years. You could buy a used copy of the book at the University bookstore for a few dollars. Oh for the good old days.

 

Thomas Erb
Thomas Erb Jan 14, 2015

@Wade Johnson

30 years ago – Paul Samuelson did this with his introductory ECON 101 text book – he made the new ones incompatible with the old ones. I think Steve Jobs took a cuefrom this when he designed apple products.

 

David Rosenberg
David Rosenberg Jan 14, 2015

@Wade Johnson I’m an engineer, origin early sixties. I found some of my dad’s textbooks acquired in the twenties and thirties to be very valuable.
As to economics, I took what we referred to as Samuelson 101. I suspect that with a half decent prof (as opposed to grad student) it would still be a fine introductory text.

 

Grubb Ellis
Grubb Ellis Jan 14, 2015

It’s part of the whole college charade… Country going mad. Complaining in forms such is this is a way to vent, but nothing will change for the better…

 

Daryl Reece
Daryl Reece Jan 14, 2015

This is one of the best piece I have seen here. Real world economics. Dr. Richardson’s example applies to so many more areas. All of government spending and health insurance fall into this bucket. They are akin to giving someone you like a birthday present while paying for it with someone else’s credit card. The sky is the limit!
Todd Curry
Todd Curry Jan 14, 2015

Unlike your college audience, we WSJ readers expect authors to do more than describe the problem — what would you propose?

 

Mario Segal
Mario Segal Jan 14, 2015

@Todd Curry

1. Colleges should demand that professors provide several options for textbooks, at least some of which must be relatively cheap – in most subjects this should be doable (exceptions will be state of the art subjects)

2. enrolled students could be allowed to borrow a special e-book that works only for the term for a reasonable price

3. The Professor needs to disclose any conflicts of interest in his class (like being a consultant to the software he uses, or being an editor for the publisher of the book, etc.) just like many others have to – this will not reduce the price, but bring some transparency

 

Todd Curry
Todd Curry Jan 14, 2015

Excellent, Mario.

25 years ago, as a starving work-study student, $100 textbooks and $100 reading packets meant $800 a quarter, or 100 hours of work (after taxes) for me.

I often met with professors to tell them the cost (most were shocked), ask them to lend a copy to the library so I or others could have free access, and asked to borrow a copy for the term.

Failing that, a friendly alum ran a copy store and let’s just say that I had an etihical, economic and legal dilemma.

On that last point, I respect the rights of authors to derive economic gains from their works, but It might be time for a Napster-like disruption.

 

William Hart
William Hart Jan 14, 2015

@Mario Segal @Todd Curry CONGRESS should demand…… Surely you jest. Would this be the same Congress whose policies have fueled double-digit tuition increases for the last 25 years?
Here are a few suggestions: (1) shop for a different teacher, (2) buy an older edition of the text (the major change in most new editions of econ texts is updating the data), (3) forgo the peripheral stuff that goes with the book (explaining to your professor why), and (4) have faculty teach more classes…… yes teach more classes….it’s much easier for faculty to impose financial burdens on students when their course is taught by a grad student.

 

Trudy Beckschi
Trudy Beckschi Jan 14, 2015

@Todd Curry
I would propose to re-use existing textbooks (rules of physics doesn’t change) and use the bloody internet!

 

Richard Voss
Richard Voss Jan 14, 2015

This is an excellent explanation which can be adapted even more directly to health care. Just substitute insurance for student loans, and government subsidies are even more dominant in health care than in education. In both cases, “prices rise unchecked if the people who order the goods [or services] aren’t paying the prices.”

 

GEORGE CERNIGLIARO
GEORGE CERNIGLIARO Jan 14, 2015

The problem may be that, once the book is sold, most buyers will either copy directly or build Powerpoint presentations as lecture material, copyrights be damned. Unfortunately, that’s cynical real world. So, the publishers say better to face that realization and take your profits early. That said, I would’ve just sold the book at $30 and allow my reputation to sell a whole bunch of them, even at volume discounts to Universities. Once this is done, then the distorting forces can’t weasel their way in to middle-man the process, and the author still makes good money… .

 

jeff wagner
jeff wagner Jan 14, 2015

this was discussed in my economics class in the 70’s the professor – yes a real professor – said that we would learn why it would be cheaper to copy the book at $.25 per page than buy one that is mass produced. Your comments above echo his thoughts and lending was just taking off

 

Juan Vega
Juan Vega Jan 14, 2015

Consumers and taxpayers are one and the same and in a sense reminds me of the cattle yards where a narrow fenced aisle channels the cattle to the slaughter house. I experienced the examples of Mr. Richardson even in 1972 when I attended Fordham University’s MBA program. One professor made us buy three books totaling over $250.00. We only read half a dozen chapters. Today I can not recall anything that I may have learned in those books. Later I taught a couple of marketing and finance courses at a state university in Florida. At the end of the term students told me they got more knowledge from my business experiences as they related to the course than from the textbooks. The material covered in books was useless and in most cases dated or obscure. As an associate I had no say in the choice of the textbook and after every year there was a need for a new edition with new material. Higher education is nothing but a scam to fleece the students and keep academia fat, dumb, and leftist.

 

Todd Pull
Todd Pull Jan 14, 2015

Text books are one thing, but are relatively trivial compared to the total costs of attending college including four or five years of living expenses. I’d start by reducing the requirements for a bachelors degree to 90 credit hours from 120.

 

KEITH FREDERICK
KEITH FREDERICK Jan 14, 2015

The same is true for health care costs when a third party payor foots the bill. Much of the spiraling cost of health care results from that alone.

 

marian lynn
marian lynn Jan 14, 2015

“Students rarely pay for books out of pocket”…
News to me.

 

Mario Segal
Mario Segal Jan 14, 2015

Some professors now make their books available for free in pdf format – and students can buy the print version for a nominal price if they find that more convenient. Coursera and other online education providers always find a way to provide materials at reasonable prices so why can’t others?
I think colleges should insist that a professor provides the option of at least one textbook that is available for a reasonable price that can be used to learn whatever they teach- maybe as an ebook or something. In the case that one topic needs something else they should strive to find alternatives
There could be some exceptions as some fields are so new that there may be no options, but certainly the majority of freshman classes do not fall on that category

 

 

Thomas Bragg
Thomas Bragg Jan 14, 2015

“Yet we professors are shockingly blind about what our students pay for the textbooks from which we teach these valuable lessons.”
I think you’re largely misguided with this statement. I had a close friend who authored a very popular college textbook and he freely admitted, at least to me, he revised the text every two years to increase his income. He knew exactly how much the books cost students, how many were sold each year and on which campuses. That’s not really a “free market” as I understand it as the new texts were generally required.
Mario Segal
Mario Segal Jan 14, 2015

@Thomas Bragg that is the problem it is not a free market, I have no problem with a professor making money from a book he/she wrote – as long as it is on a free market where student can choose
Many professors use their own book for their class – no free market there.
I had a professor who in addition read from his book during class – so he did not add any value on the lecture (I needed the credits to graduate, so I just attended, got my grade and moved on)

 

David Zamos
David Zamos Jan 14, 2015

@Thomas Bragg
Very well stated.
Indeed, a close friend of mine is a professor, and he shared with me that a “new and improved” edition of a text he uses had been released a few years ago and, as part of the promotion of this allegedly improved textbook, he was contacted by the publisher and encouraged to require that his students purchase this allegedly improved latest edition that cost a bit over $200.00 while used copies of the previous edition that were in good condition were available online in the range of $12.00 to $16.00.
When my friend checked the new edition, he noted not a single change in the text or the graphics that were included in the previous edition was made. Accordingly, he contacted the publisher and asked what had been added or changed in the latest edition. The answer was simply that the latest edition uses a “more readable font” that’s allegedly “easier on the eyes!”
This is but one reason our children’s college educations are so ghastly expensive.

 

Mark McGarvey
Mark McGarvey Jan 14, 2015

Right On Mr. Richardson! This isn’t a ‘new’ problem for sure. We experienced the same with our daughter back in the early 90’s — my husband & I thought we had diligently saved for her college education, at a state university in AL. Boy were were shocked to find out that some semesters, the cost of books exceeded the tuition and in her final year of college, cost of books exceeded tuition, room, board AND fees combined. More professors need to learn the lesson on which he writes – especially those that require students to purchase a book they authored. Pat Burris
ROBERT HOLTON
ROBERT HOLTON Jan 14, 2015

Sadly, this is also an accurate model for employer provided health insurance and insurance paid health care.
Kevin Berman
Kevin Berman Jan 14, 2015

Timely, just paid $513 for my daughters books for only two classes (other two start today so expecting more). I about choked.
David Zamos
David Zamos Jan 14, 2015

@Kevin Berman
My youngest son graduates from dental school this spring. When he entered dental school, he was given a list of typical expenses he could anticipate facing. What caught my attention was that the per semester cost of textbooks and related material was estimated to be $4,500.00 a semester!
To be fair, he got away spending a bit less than that, but still, the cost of the textbooks he needed was nothing short of stunning.
MICHELLE MADSEN
MICHELLE MADSEN Jan 14, 2015

Thank you for the column, what you say is true, however, it is also exacerbated by the fact that in a true free market the consumer has a choice in which product to buy. In the student’s case they don’t. A particular textbooks is prescribed by the syllabus. They must buy that book for the course – or take a chance with their gpa that another book might be a good substitute. This also affects the elasticity of demand, as does the 3rd party payment problem the professor mentions.

Additionally, many professors, at least in my experience as a college student, write the textbooks that the prescribe for their own courses. Not all the time, but very frequently my professor’s name was author or co-author or contributor on my textbooks. Perhaps that is something peculiar to the major, I was an econ major.

Anyone have any idea what type of compensation professors receive for that type of thing?
Montague Brown
Montague Brown Jan 14, 2015

Outrageous prices for books which add little to basic books of years ago.
But the incentive structures are in place for everyone to push the cost to others.

are not repaid? Who loses when graduates do struggle to repay loans, forgo other early years investments in home and family?
Lots of losses accumulating in the economy. Mostly because of government intervention into th place.
Robert Stewart
Robert Stewart Jan 14, 2015

The cost of this textbook explains why Obama never took economics.
Donovan Hinds
Donovan Hinds Jan 14, 2015

@Robert Stewart
No current Democrat officeholder has ever taken Econ 101.
Donovan Hinds
Donovan Hinds Jan 14, 2015

$250 bucks. Yup, really.
The real scam is when colleges require the purchase of extra CD’s of material that can only be bought with the textbook from the college bookstore, so buying or renting the book from an online retailer is impossible.
Daniel Giers
Daniel Giers Jan 14, 2015

@Donovan Hinds Oh and my personal favorite, the college-specific proprietary version that is impossible to find because the colleges make their version specific.
Gregg Larson
Gregg Larson Jan 14, 2015

So many of these books have uses for years. The best use of old books was several piled up in the bottom of a refrigerator on which to set the front a keg of beer.
Timothy Evans
Timothy Evans Jan 14, 2015

Having worked at the only bookstore on campus in between quarters in the mid-to late 70’s, I can attest to the fact that this is not a new problem. Screams were heard even then from students struggling to purchase textbooks at exorbitant pricing.
That this professor is surprised is surprising. I suppose it means there is at least one professor out there that isn’t in on the scam.
In a conversation a few years back with a history professor, he willingly acknowledged that which we all know – minor alterations in textbooks are made at least every other year to “fight” the used book market.
That this was placing a tremendous burden on students and their families wasn’t remotely a consideration. These scammers have even bee able to sidestep the Kindle as a completely logical and technologically superior alternative, even they thought purport to be on the vanguard of technology.
Their own greed will soon force them into the unthinkable position of having to earn a living.
James Highsmith
James Highsmith Jan 14, 2015

High cost texts are discouraging student learning. As a professor, I did pay attention to the cost of textbooks, finding low cost books that could be purchased used, as e-books, or rented for a small fraction of the price of new hardbacks. “New editions” are also a racket. Comments about how publishers work are mostly accurate. Textbook prices are much too high. In addition to there not being a ‘free market,” all the “supplements” publishers develop to assist the teacher add to costs. This leads to overuse and reuse of multiple-choice question banks, making it easier for students to cheat on exams. High cost also gives a student an excuse not buy or read the textbook. All of this contributes to students learning less. I preferred to find an inexpensive text and assign my own problems and essay exams, where students had incentives to read the text and attend class.
KEN BLAIS
KEN BLAIS Jan 14, 2015

“The easy access to financial aid has meant there is no natural binding mechanism on price increases, since the pain of rapidly rising prices is scarcely felt by years of student-loan payments.”
“I’ve routinely missed a perfect opportunity to explain how markets fail to deliver efficient solutions.”

So, government is responsible for the mis-pricing of the textbooks, but this somehow is a failure of “markets”?

Richard Sherman
Richard Sherman Jan 14, 2015

My just-published Business Intelligence Guidebook is priced for the trade market even though it is also intended to be used as a textbook. It was really important to me that the publisher do this. As an adjunct professor and father of a college student and a recent grad I’m sensitive to text book costs. $250 is out of control.
Charles Smith
Charles Smith Jan 14, 2015

@Richard Sherman for those of us not in the publishing business…priced for the trade market means…?
Donovan Hinds
Donovan Hinds Jan 14, 2015

I could publish an Econ 101 e-textbook for $10.
Charles Smith
Charles Smith Jan 14, 2015

@Donovan Hinds sounds like there’s a need, Mr. Hinds. If you published a e-text for $10 bucks and it was equivalent to the $250 text, you should be able to capture a significant portion of that market.
Jeff Guse
Jeff Guse Jan 14, 2015

So quit forcing them to buy the $250 textbook. You’re part of the problem, not part of the solution. Of course it is easier to feign concern than to actually DO SOMETHING.
Steve Green
Steve Green Jan 14, 2015

Why dont these politicians who spend a lot of time introducing laws that are of no use to the majority of taxpayers address the price gouging going on across the country at every college or university? It is a scam and everyone knows it.
James Highsmith
James Highsmith Jan 14, 2015

@Steve Green That has happened in California.
Tom Mackinnon
Tom Mackinnon Jan 14, 2015

@Steve Green – Students get loans. The loan $’s go directly to the schools. Costs go up, as indicated in this article, because the students are not paying costs directly. Students leave school. The loans are forgiven by the government. You & I pay.

Rinse, repeat.
John Pound
John Pound Jan 14, 2015

@Steve Green Because the politicians are the ones who created the very policies that generate ballooning tuition, fees and book prices.
And their buddies in academia are the ones enjoying the taxpayer funded windfalls..
WILLIAM KEEFE
WILLIAM KEEFE Jan 14, 2015

Interesting conclusion, seeing the $250 textbook as the creature, first of government loans, then inattentive professors and finally the financially irresponsible student.
It should have concluded as follows:
The $250 textbook, a creature of: A product distribution system in which profs act as agents of the distributor, receiving gain to avoid looking for less-expensive alternatives for their students.
Why? This prof has been teaching for 25 years, participating in this process and doing nothing about it. Is he required to? Nope. But it is at best slightly disingenuous to say “professors who pay no attention to prices.” They are fully aware of prices but they’re free-riders on a system paid for by their students.
The $250 book is not, however, a creature of loans or students who are looking “to push the cost down the road.” Often, the loan is the only way the student can participate. And, as the writer points out, the student can’t work long enough to pay for all her/his textbooks.
John Pound
John Pound Jan 14, 2015

@WILLIAM KEEFE Disagree regarding the loan aspect.
As the taxpayer funded spigot of loans, grants, guarantees etc has been opened wider and wider, to subsidize “access to education” we have actually subsidized inflationary spirals in tuition, fees and books.
The cost to produce a textbook back in the 1980s when I was buying them has declined simply due to technology and expanded student headcounts in today’s market.
The only reason a big textbook costs $250 and not the $80 I paid is inflation.
WILLIAM KEEFE
WILLIAM KEEFE Jan 14, 2015

@John Pound @WILLIAM KEEFE
Mr. Pound, while I would agree that the accessibility of loans could likely be tied to the lack of constraint that colleges feel to hold back price increases, there is neither a logical nor economic connection between the volume of loans available to students and the cost of these textbooks.
This is a purely microeconomic problem of an inefficient market for books; one in which the suppliers have constructed a series of barriers to the effectiveness of market forces, like providing disincentives to professors to help students find lower cost alternatives.
Newell Everett
Newell Everett Jan 14, 2015

I think I want to be a textbook author when I grow up…
ALAN LANCTOT
ALAN LANCTOT Jan 14, 2015

@Newell Everett Go to grad school….you can write a couple of chapters of a textbook, hand it in to your professor so he can put HIS name on the book and you may get a mention and a good grade….its been done for decades…
Carl Christie
Carl Christie Jan 14, 2015

@ALAN LANCTOT @Newell Everett
Some technical books I used, from the stone age, had drawings made with a square and pencil.

Over the years I worked with a few of the ‘contributors’ .
The story was always the same, the best in class were given ‘special assignments’.
Thomas Erb
Thomas Erb Jan 14, 2015

@ALAN LANCTOT @Newell Everett

30 years later – I still remember my professor who sold us his new book in a photocopied/galley form at full price – and gave an “A” to any student who found a mistake. The book quickly fell apart.
Pete Smith
Pete Smith Jan 14, 2015

This professor/college could help the students. He/college could buy all the books and rent them for a very small fee. You get the book with a $250 deposit. You get back $225 at the end of the semester with the return of the book. Invest the money for 4 months. This text book could be used for 10 years. Every decade buy new books.
Tom Mackinnon
Tom Mackinnon Jan 14, 2015

@Pete Smith – good idea. Many college book stores do that today
ALAN LANCTOT
ALAN LANCTOT Jan 14, 2015

@Pete Smith Nice suggestion, but….the college bookstores are part of the $$$$$ problem….Barnes & Nobles is in the college bookstore business so who’s interest are they looking after???…book rental is offered but not so very successful….

and using the same textbook for 10 years? After year 3 they’re pretty beat…..
Pete Smith
Pete Smith Jan 14, 2015

@ALAN LANCTOT @Pete Smith Agreed. How about 8 semesters? That would recoup $200 at $25/per semester. And if the book store wouldn’t do it, maybe the professor would as a demonstration of sound economics and entrepreneurship. I try to use real world examples in my high school classroom – auctioning donuts for example. Perhaps this prof could do something similar?
ALAN LANCTOT
ALAN LANCTOT Jan 14, 2015

@Pete Smith There are a lot of tricks in this game…..the books salesperson goes to the department chairman and with digitization they “design” a book. For instance, with accounting textbooks,

in the West there is more interest in accounting issues dealing with water and mineral rights, so the the prof has a litany of “chapters “to choose from to make the book for that class more relevant.

In the East they may want books to have more chapters discussing banking issues, so voila……

…..next year the dept chairperson wants different topic for discussion……last years book is now obsolete…..at $250 a pop there’s lots of $$$$$ to go around to ensure a “new and more relevant”

textbook next year……every college can have their own “custom” made textbooks……and a great source of revenue……
Tom Mackinnon
Tom Mackinnon Jan 14, 2015

This can be applied to pretty much everything the government tries to control – college costs/student loans, healthcare, etc.

Interestingly enough, arbitrary price controls outside of market dynamics, don’t work either. Healthcare costs are a perfect example – not only are the costs going up so quickly because the people using the service are not paying the prices, but the government, in its infinite wisdom, have price controls in place (Medicare & Medicaid).
John Pound
John Pound Jan 14, 2015

@Tom Mackinnon And we see the result of price controls happening: fewer physicians willing to treat Medicare patients and dramatically fewer willing to treat Medicaid patients…
James Kahn
James Kahn Jan 14, 2015

Actually, the textbook market is disintegrating as we speak. First, no one pays the full list price. Even retailers discount. Then there are electronic versions made available for significantly less. And of course the used textbook market is active, and students know that they usually can get away with using even a previous edition at a substantial discount. Second, there is a growing supply of free online textbooks. While these have not achieved much penetration yet, I suspect they will grow in importance. Believe it or not, many professors are aware of costs and provide students with alternatives.
John Pound
John Pound Jan 14, 2015

@James Kahn The day will come when the vast majority of students will have electronic access to lectures by the top educators in each field, and the local bricks and mortar university will be reduced to dorms, labs, clinicals and study groups led by teaching facilitators.
This should be making a lot of the other 90% of professors and teaching phds very nervous….
Martin Greller
Martin Greller Jan 14, 2015

Full disclosure, I am a professor and about to assign a textbook. My review copy did not tell me the price, but the internet does.

The the newest edition lists for $264. I am assigning the previous edition (2 years old); it sells for $218 new. But, after two years there is a market for used texts. Amazon offers this edition used for $124. To compete, the publisher rents the text for $54. Students respond to high prices. For examples, two or three students may pool resources to buy one copy to share.

It is hard to imagine that any faculty are unaware of this issue. Some courses require the latest information (which may mean forgoing textbooks altogether). Some work is timeless (Adam Smith’s The Wealth of Nations is free in its entirety online). The previous edition works for my course.

I agree with Prof. Richardson; faculty need to recognize price in their decisions about required texts. However, the dynamic of buyers and sellers is alive, even in the textbook market.
John Wolfsberger, Jr.
John Wolfsberger, Jr. Jan 14, 2015

@Martin Greller Tell your students at least one commenter said they were lucky to get you.
John Pound
John Pound Jan 14, 2015

@Martin Greller How prevalent is the use of e-textbooks in college these days?
There ought to be significant cost savings there…
Dennis Paine
Dennis Paine Jan 14, 2015

@John Pound:
To your second point, Professor Greller cited the e-book (rental) cost of $54, a savings of approximately 80%.
Martin Greller
Martin Greller Jan 14, 2015

@John Pound @Martin Greller

Hope an expert on publishing weighs in on this.

From what I’ve seen the savings have been less than I would have expected, although recently there seem to be deeper discounts in the competitive, introductory courses. A number of students tell me they like texts in the old fashion printed-on-paper format, because that is the way they are accustom to using texts (e.g., marking pages, referring back to previous sections, etc.). Publishers tell me that the same thing can be done with online versions.
Dennis Paine
Dennis Paine Jan 14, 2015

@Martin Greller:
Professor Greller, have you looked at Amazon’s CreateSpace for self-publishing?
http://www.createspace.com/‎
You may learn something that ‘publishers’ aren’t telling you . . . and discover a most economical alternative for your students.
Jeffrey McErlean
Jeffrey McErlean Jan 14, 2015

The same argument can be made for health care. For example, the Medicaid patient, whose “insurance” is really a Platinum Plan entitlement with $0 Deductible, $0 co-pay and $0 Premium thinks nothing about going to the ER because he has a runny nose. On the other had, the average middle-class worker, whose Deductible, co-pays, and Premiums have now increase 300-400% because of Obamacare will think twice about an ER visit, and will probably go to the drug store to pick up some decongestants before incurring a significant hit to the family budget.
Daniel Giers
Daniel Giers Jan 14, 2015

@Jeffrey McErlean And even more frightening, that same insured individual might be terrified of the $15,000+ bill so much that he may not seek ER services despite a potentially serious issues underlying
John Pound
John Pound Jan 14, 2015

By extension, the professor has nicely summed up the health care cost spiral as well…
Chris Harper
Chris Harper Jan 14, 2015

A good lesson for all of us academics! Well said.
David Heindel
David Heindel Jan 14, 2015

All true, and well said. Note: the net cost of the book has likely dropped because online sellers now provides a highly-liquid market in used books. That $250 text book in used condition can usually be sold directly to another student for $200+, or even traded in for a $200 gift card on the aforementioned online seller. This, too, is a great illustration for Econ 101 students — efficient markets benefit buyers and sellers.
Carl Christie
Carl Christie Jan 14, 2015

@David Heindel

“That $250 text book in used condition can usually be sold directly to another student …”
It appears that each class my son and daughter take requires a newer addition! This edition is so unusual that google can only find a few references, all from the publisher or school bookstore.
Some have an internet link that only works for the first user.
Who benefits?

Legend had it the instructors received a kickback.

David Heindel
David Heindel Jan 14, 2015

@Carl Christie @David Heindel That’s why the global market Amazon provides is so beneficial. If just takes a few minutes to set up a seller account so you can sell back books to students all over the world. I have had as many as 3 concurrent college students, and the vast majority of their expensive books (not true of cheap paperbacks) were in high demand used. By buying high quality used books and selling them back at the end of the quarter, I’m able to drastically reduce my net costs. They almost always sell within a day or two.
TOM PAINTER
TOM PAINTER Jan 14, 2015

“The cardinal lesson is that prices rise unchecked if the people who order the goods aren’t paying the prices.”

The “market” (for textbooks) did not fail, on organic supply and demand terms. The text book market has been warped (like insurance “paid by the employer”) to evade the full price scrutiny of the actual “buyer”. In affect, the text book market is not an open, free market. The buyer is not even “choosing” what to buy – it is a demand placed on the buyer (like Obamacare); they are told “you have to buy…………”.
I wonder what an “economics 101” class would be like if the students selected an “economics 101” textbook on their own, and as the professor laid out the course and brought its topics to the table, the students would be offering possible competing ideas and solutions, from the “economics 101” source they’ve used. Would that or would that not be more intellectually stimulating than a stale lecture from the one view of the professor; and their expensive book.
Michael Henson
Michael Henson Jan 14, 2015

(The textbooks haven’t changed all that much, by the way.)

It’s not a free market either, because different professors require different textbooks. Books whose consumers are captive to the requirement that they buy it. The new editions make prior versions that “haven’t changed all that much,” but enough that they are difficult to use. Used copies of previous texts are head to find, and I’m not certain that publishers don’t buy them up from bookstores to keep demand high for new ones.

The lesson, manipulated markets do not work. Add the issues the good professor writes about, and a $25 book goes for $250, where’s the governments crack team of consumer cops on this one?
Bill Wald
Bill Wald Jan 14, 2015

What required textbook material could NOT be downloaded at no cost from https://www.khanacademy.org/ ? Just asking, I don’t know.
As one prof. told the class, “Never take a class from the guy who wrote the book. He will think every chapter is important. Other profs will say, “you can skip chapters . . . .”
John Lonergan
John Lonergan Jan 14, 2015

Expenses and tuition at Brown University, my alma mater, have climbed 3x inflation over the past 30 years. Brown is “proud” to be one of the top 10 most expensive colleges in the US at $60K/year for tuition. Brown now has 1 employee for every 2 students–most of the increase in staff costs have come from administrators, not professors. Brown has 229 departments!

Increasing textbook costs are a part of this spiraling cost increase. Since the US government is footing the bill through loose student loans, colleges (like Brown) have responded by raising prices across the board. As a result, student debt in the US is now higher than credit card debt.

This increase in textbook, tuition and other university expenses is immoral and unsustainable.
Jim Allen
Jim Allen Jan 14, 2015

Here’s an idea, why not require the school to supply the textbooks by statute as a part of the class? If the school were forced to buy the textbooks, you can be sure they’d work to minimize the cost. Ideally a free market would exist and set prices, but we can’t have every student reading a different textbook. I generally am staunchly against additional regulations, but this seems like it might have some merit. Although I suppose the school might be inclined to add $250 to the class tuition and pocket the savings they accrue with their new found buying clout… Not sure how that wouldn’t lead to even more opaque rules and government requirements. Ummm, nevermind I think I’ve grasped the problem again. 🙂
CARL R. MATTES
CARL R. MATTES Jan 14, 2015

Professor Richardson, please tell me that you’ve solved this problem and how? I’m guessing that your Spring semester just started, tell us all how you’ve implemented this “lesson” into a teaching moment. I’m looking forward to your response.
If it is not too late, you can pick up Thomas Sowell’s 5th Edition of “Basic Economics” at any bookstore for approx $31.
GARY FIELD
GARY FIELD Jan 14, 2015

The high textbook cost is often a reaction to the resale market (as some comments mention). A prof could invest years in writing a textbook, which is then followed by a publisher investing in book and supplementary teaching material production. Eventually, the publisher collects the wholesale revenue, and the author receives a royalty.
Next, the student, after completing the course, often sells the textbook back to the bookstore or through some other market (eBay, Craigs List, etc.). The publisher and the author receive zero income from these resales, which continue year after year until a new edition is printed.
The new edition, which sometimes contains just minor revisions, is often a way for the creator and producer to recoup the investment when the first edition is sold at a modest price. Alternatively, a high initial price without frequent new editions, helps provide a commensurate return, but encourages reselling. There is indeed an economics lesson to be taught here.
michael radowitz
michael radowitz Jan 14, 2015

We need more people like you, Professor.

Here here!
david berliner
david berliner Jan 14, 2015

Thus the same reason medical costs are out of control- third party payers.
C.I. Mothershead
C.I. Mothershead Jan 14, 2015

Excellent story. The answer clearly is on line material. That and PROFESSORS that stop requiring a textbook because they are too lazy to design a course without one.

Hint Hint.
Aneil Mishra
Aneil Mishra Jan 14, 2015

@C.I. Mothershead I dropped “textbooks” years ago for my management and leadership courses because of their high costs and “density.” Instead, I use best-sellers that are research-based and practically relevant (e.g., Deep Change by Robert Quinn; Strengths Based Leadership; First, Break All the Rules). I supplement with WSJ and other articles. Full disclosure, I require them to buy one of my own books, written partly out of frustration with the deficiencies of others’ books (not all of my students buy my book; I also give out copies as well, it retails for $31 new).
Rampant inflation of textbook prices is as unjustifiable as the inflation in tuition and fees. My current university offers a great bargain ($3000/semester in-state tuition and fees). My alma mater, Princeton, not so much ($60K/year all-in). If Princeton were to charge students what it charged me in 1980-84, it would be about $25/year.
Aneil Mishra, Ph.D.

Thomas D. Arthur Professor of Leadership

East Carolina University
Madison Bagley
Madison Bagley Jan 14, 2015

Bravo Professor Richardson. And it isn’t just econ books. My basic circuits book cost $8.95 in 1970 and the same book is listed on Amazon for a rental fee of $71.38 or you can buy it for $162.62. Note that it is identically the same book published in 1969.
Thomas Erb
Thomas Erb Jan 14, 2015

@Madison Bagley

Just checked on my signal processing book – “Principles of Communications” – $210.00 on amazon – I think I paid $75.00 in 1981 – and if you plug $75.00 into an purchasing power calculator you get $256.00
William Jackson
William Jackson Jan 14, 2015

A used “Principles of Economics” can be had for $25-30 on-line. I, pretty much, only buy used books.
Frank Roso
Frank Roso Jan 14, 2015

The textbook market is not a textbook case of markets failing to deliver efficient solutions. For the paradigm to ring true, students could choose from a variety of economics textbooks and purchase those they deemed best. Instead, the professors decide which books they wish to use and mandate that the students buy them. The books may be written by those professors or simply are the books of their favored authors. In any case, there is no freedom for alternative products to be bought and used.

Textbooks were expensive four decades ago when I was in college as well and for the same reason. What really rankled us was that the required texts often changed semester to semester, reducing the market for our used textbooks. It hasn’t changed.
Jonathan Fox
Jonathan Fox Jan 14, 2015

The problem with the textbook industry I have is the new editions rolled out every two years where the change might be the chapters rearranged, or some new pictures. Subsequent incentives are put on the professor to require the new edition, thus making used copies non-existent.
Francine Butler
Francine Butler Jan 14, 2015

Students are at the mercy of the publishing industry!! And professors are not much better off either. As a retired professor of 35 years in Economics myself, I have seen a myriad of texts at outrageous prices – witnessed students being gouged needlessly!!

And revised editions were merely the minor change of a chapter heading or an inclusion of a new table.
Tom Silver
Tom Silver Jan 14, 2015

“It seems like a natural end of chapter one question, doesn’t it?”

It sure does, and it’s also a great point for candidates to address in the presidential debates. But don’t expect your fellow economics profs to use your great example – since they are part of the problem.
Dom Fried
Dom Fried Jan 14, 2015

No worries, sir. Electronic education firms such as Pearson are driving physical textbook publishers out of business. And the high book prices are making the job much easier.
The market is fractured with every higher ed making independent choices, and every locality doing the same for primary and secondary. Thus there is no barrier to entry. Anyone can create a system and sell it to at least a few schools. And they are.
Don’t write your first lesson just yet. The extinction will be an even better lesson.
Otis Copeland
Otis Copeland Jan 14, 2015

I worked for a textbook reseller when I was in college. We would send buyers out to campuses all over the country and buy textbook samples from teachers for cash. We would then bring them back and sell them to college bookstores around the country. I’m sure the textbook publishers hated our guts but we did provide a service that people gladly took advantage of, cheap textbooks.

The publishers on the other hand, would come up with new editions every other year which would make the old edition obsolete and the process would start all over again.

A popular textbook in the 70’s was Economics by Paul Samuelson. I just Googled it and found it on line for $275.00!!!
Daniel Murphy
Daniel Murphy Jan 14, 2015

@Otis Copeland Samuelson used to make minor changes to his textbook each year, particularly the questions at the end of each chapter. He was trying to prevent the re-use of his textbook by next year’s students.
No surprise, Economics professors would always require the latest version of the textbook and assign End of chapter questions for homework. Perhaps it was to teach us a lesson in economics, for enterprising students could always get the questions from the latest edition from friends, the bookstore, or the library.
James Mulcahy
James Mulcahy Jan 14, 2015

the key point is that the texts really haven’t changed that much. Yes, there is more on phillips curves, rational expectations, game theory, and newer examples but if given a choice who wouldn’t choose to use Alchain & Allen’ University Economics over any of these overweight tomes?
Fred Sabetta
Fred Sabetta Jan 14, 2015

Chegg
James Mills
James Mills Jan 14, 2015

@Fred Sabetta Yup. $54 to rent the 8th edition, and only $15.50 to rent the (likely similar) 7th edition.
JOHN FOSTER
JOHN FOSTER Jan 14, 2015

Back in the day, 1973, I was going to school on the GI Bill, I was faced with a dilemma: I was an Accounting student, I was pushing 30 and The Big Eight did not hire old guys. During academic year 1973-1974, at California State University Northridge I went to class for both semesters, plus winter and summer breaks. In that 12 month period, I did 48 semester hours with a 3.8+ GPA. Total cost was $900.04 for tuition and books. My employer reimbursed me the entire $900. My G.I. Bill benefit was $480 per month tax free.

I didn’t get a job at any of the Big Eight. A couple of years later, the hiring partner in the LA office of AA&Co told me they figured I wouldn’t be able make the commitment they needed because I had a family, six kids, and was too old.

$250 for one text book? Wow! I was lucky. My granddaughter starts college in the Fall so I’m planning on donating before the sticker shock drops my son.
charles smith
charles smith Jan 14, 2015

Substitute the words “$10 aspirin” for “$250 textbook” everywhere it appears, and you have an equally good description of how U.S. healthcare has gone off the rails. Same causes, same sorry results.
Marie Flatley
Marie Flatley Jan 14, 2015

The author seems right but there are a couple of additional points to consider — textbook buyback and the Internet. While retail prices might look high, the publishers have to cover all their costs in the first printing. But most students today who buy that new book end up selling it back to college bookstores or selling it on their own through Amazon, eBay, and other online sources. In fact, today books are a lot like cars with the first and last user paying the bulk of the costs, but they are shared costs. The efficiency of the Internet has disrupted textbooks sales much the same as it has disrupted other businesses.
William Hall
William Hall Jan 14, 2015

My Auditing Professor wrote the textbook for the class and since if was still a “work in progress” he gave each student Xerox copies of each Chapter when we got there in the course.
Marie Flatley
Marie Flatley Jan 14, 2015

@William Hall Some professors use books from Flatworld Knowledge. As I understand it, students get the option of electronic access for free or ordering a print copy.
Arlen Meyers
Arlen Meyers Jan 14, 2015

Maybe you should be teaching healthcare economics. It would take one class lasting 15 minutes and you wouldn’t need a textbook.
David Maney
David Maney Jan 14, 2015

Justin Murray
Justin Murray Jan 14, 2015

It’s all about the corporate tax structure. I can buy the same book, same edition, in English, from India, for 10% of that price. But because of a combination of it being illegal to import textbooks from overseas and the Federal government’s tax on unsold textbook stock, we get high prices.
The Government has upended America’s old-standing print advantage on the world. In the 1800s, British authors preferred to sell their works in America despite America at the time not having ANY copyright laws because printers pumped out large volumes and sold in bulk. Copyright advocates convinced the Government to tax this excess stock to avoid the practice and drive unit prices up. Add in the ban on imports and you got a local lock on low volume, high cost production.
Simply repealing the holding stock tax would drive textbook prices down to what we see on the worldwide market since producers no longer have the incentive to run at an inefficient scale.
Erika Lockhart
Erika Lockhart Jan 14, 2015

One of the tasks for students in college is to learn to cite sources and how to decide whether they are credible. My experience has been that many textbooks are filled with biases to the point that they are not credible sources of information. Students rely upon professors to steer them to reliable sources. It’s kind of down to the professors, I think, to decide whether the texts are worth the money and this article asks that question, in a manner of speaking. Seems to me there was an article a few months ago about a professor who stopped requiring a lot of texts because of expense to students when information was available elsewhere. Textbook companies often reissue texts with few changes in new editions. That drives up prices and reduces the value of previous editions. It’s interesting that “free stuff” seems to be more of an influence in selection of educational materials than content.
ALBERT N. GRECO
ALBERT N. GRECO Jan 14, 2015

Regarding Justin Murray’s recent comment: “I can buy the same book, same edition, in English, from India, for 10% of that price. But because of a combination of it being illegal to import textbooks from overseas and the Federal government’s tax on unsold textbook stock, we get high prices.”
Mr. Murray is wrong. Under the terms of the U.S. Supreme Court’s March 2013 decision in the “Kirtsaeng BlueChristine 99 vs. John Wiley & Sons, Inc.” decision, English language textbooks can be imported legally into the U.S. from India or elsewhere.
That decision is available on the Supreme Court’s web site; and the decision has been widely covered in both the popular press as well as various legal documents and web sites.
Albert N. Greco

Professor of Marketing

Fordham University
David Bryan
David Bryan Jan 14, 2015

“… the decision has been widely covered in both the popular press …”

What brand are you smoking? The popular press rarely covers SCOTUS unless it’s issues lke Obamacare. They spend much more time on socialites than on Scalia.
ALBERT N. GRECO
ALBERT N. GRECO Jan 14, 2015

Regarding David Bryan’s recent comment: “the decision has been widely covered in both the popular press..”
The following is a partial list of news outlets that covered the Kirtsaeng decision of the U.S. Supreme Court.
The New York Times: March 19, 2013.

NPR; March 19, 2013.

Forbes: March 20, 2013.

Publishers Weekly: March 19, 2013.

The Huffington Post: March 19, 2013. Also see October 29, 2012 article about the Supreme Court oral arguments about the case.

Inside Higher Education: March20, 2013.
Albert N. Greco
ALBERT N. GRECO
ALBERT N. GRECO Jan 14, 2015

Some additional reading for David Bryan re the Kirtsaeng decision of the U.S. Supreme Court.
CNBC March 19, 2013.

The Hollywood reporter. March 19, 2013.

The WSJ March 19, 2013.

The Washington Post March 19, 2013.

Bloomberg March 19, 2013.

The LA Times March 19, 2013.

The Mercury News March 19, 2013.

The Seattle Times March 19, 2013.

Others news outlets covered the oral arguments, etc., including CNN, CS Monitor. Bloomberg, Business Week, etc.
Again this is a partial list. But it looks as if a number of news outlets covered the decision.
Albert N. Greco
Drew Becker
Drew Becker Jan 14, 2015

Excellent article Mr. Richardson. Another great first day lesson would be to introduce price impacts because of substitution and other market forces. Many students choose free trial ebooks, then print them off, or rip the book offline illegally. Furthermore, old editions are bought as well. I had plenty of professors that were strictly against both, so they could continue to get all their kickbacks of course. Like a required subscription to the WSJ? Only ‘requirement’ I’m ever happy I took as one!

Hoping to see you write more often!
Daniel Heath
Daniel Heath Jan 14, 2015

The market does work.Amazon rents this book for $61, including postage

both ways. That is in line with the 1982 price.
Michael Steele
Michael Steele Jan 15, 2015

I expect in time, there will be no print textbooks, just e-books for e-readers. Less back strain carrying them around and a source of electricity to keep them charged.

Greg Brown
Greg Brown Jan 15, 2015

there’s an app that pulls together free content to match any textbook – considerably inferior option, but you can’t beat the price, and will force traditional textbook publishers to get back to reality
George Kuck
George Kuck 13 days ago

I taught at a CSU where many of the students were the first in their family to go to college. Money was very important to these students. The way I fought the price of physics textbooks was to assign the most recent edition’s problems on Webassign, an online homework system. Webassign cost the students about $25. Then they could use the earlier editions of the textbook bought at a lower cost. Other professors could make up the problems they wished the students to do and put them on their school’s IT system. Then older editions of the texts could be used. Lacking that, dover books has older books republished at lower costs. It is the arrogance of the tenured faculty that choose and specify the editions has put this burden on the students.
Pete Werner
Pete Werner 12 days ago

Maybe you could use this opportunity to explain another basic concept of economics to your class: SUBSTITUTION. Is Mankiw’s book really THAT good?! Is he the only Economist out there worthy of writing a textbook on basic economics?
Your article left me with the impression that there a lot of dimwitted Economics professors out there who don’t understand the essence of the material they’re supposed to be teaching. Were this group a little more capable (say, capable enough to be employable in the private sector), they’d have realized by now that the supply-demand relationship is not functioning property and that an entrepreneurial capitalist could step into this imbalanced market and earn an attractive economic return, while helping move the market back into equilibrium by providing a superior (and cheaper) alternative.
That assumes that Economics professors still have faith in a free market – a dubious assumption based on quality of the recent grads I’ve been forced to hire.
Editors’ Picks

 

 

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s