I am surprised at the cost of non-specialised undergraduate textbooks these days. First because, as a parent of a university student, I get presented with what seem to be huge bills each semester and second because I as a first-year instructor I set hundreds of students each year texts that seem to always cost more than $100 per volume.
Incidentally I am also annoyed by claims that professors could not care less about the cost of texts because they do not pay the costs – this is untrue. This professor at least does exercise concern. Many students work part-time in relatively low paid positions and a bill of $500 per semester for texts is a real burden. In addition it is often an unnecessary burden given that many undergraduate course materials are fairly standard and could in principle be supplied online at zero cost. Many course materials and course guides are provided online in any event.
As a general issue consumers are better-off if they can be offered cheaper goods and services – and with respect to textbook provision they can be.
In microeconomics where I teach there are dozens of texts on the market which cover more-or-less the same content and many of which are updated every year or so with new editions and new paginations designed to ‘kill off’ the second-hand market. While some of these Australian versions of US texts are good many offer product differentiation only in treating an unnecessarily large range of topics. They do not teach core material better. Many are appallingly proof-read and poor value for money – in my view the authors should not claim publication credit for participating in commercial scams. We would all be better off if fewer high quality texts were written.
Of course the strategies of the textbook vendors in pricing high but in killing off the second hand market reduce the value of buying a textbook. Whereas almost all undergraduates bought all recommended texts 20 years ago my contacts in the University Cooperative Bookshops tell me the figure has fallen to about 50% today. Why buy an incredibly expensive text that will have low resale value because suppliers can be anticipated to intervene to ‘kill off’ the second-hand market?
Greg Mankiw asks the question why don’t critics of excessive textbook pricing provide texts competitive with those claimed to be over-priced? It is a fair question. My guess is that the use of ‘big name’ US professors in an Australian market where the cultural cringe is alive and well, provides a strong barrier to entry of perhaps equally competitive locally-produced texts. Reflecting the strength of cultural cringe factors academics at one large university I know advise their best graduate students not to pursue their PhD in Australia. Too many Australian academics buy what is obviously just self-interested deceit.
With respect to book publication there are substantial fixed costs that need to be incurred in marketing new textbooks. Large firms with established distribution and marketing efforts can impose big entry barriers here.
How to defeat this manipulation? One immediately pragmatic response if you do use texts authored by our US ‘betters’ is to issue reading lists which include references to past as well as current editions so that ‘killing off’ the second-hand market works less effectively. Another response is to not discourage students in their development of creative skills with photocopying machines. Instructors should be careful with your words here or the greedy publishing houses will be on your back with legal actions – a text of 500 pages could be photocopied at the University of Melbourne library for about $30 (12 cents per page) although this would violate copyright law. Photocopying short sections of texts that are provided in the Reserve sections of libraries is legal and should be encouraged as a substitute for complete texts.
Probably the best solution of all is to use online material as texts and to encourage reading of reference texts in the library. A few texts have been placed online for free and this is definitely the way of the future. Greedy publishing houses who charge monopoly prices for overrated, poorly-written US-style textbooks that have limited resale value are creating incentives for their own destruction.