As I write this blog, I am looking at my Samuelson Economics textbook that I purchased in 1970 for $12. If you were to purchase a similar hardcopy text today (which included chapters on both micro and macro), you would pay in excess of $300. Has inflation increased that much? If textbooks increased only at the rate of inflation, it would only be 6.25 times higher or $75. If you look at the attached chart, the textbook industry as far eclipsed other industries in price increases since 1980. What then is causing the extreme price increase? It would be in one word, Oligopoly. An Oligopoly is any industry in which the top 4 companies control more than 40% of the market. If you look at the top 4 publishers (chart), they control 75% of the industry. There is an obvious lack of competition, and there is often times the rumors of price collusion (which is illegal). In addition to consolidation in the industry, which if you remember your basic economics, it shifts the Supply curve to the left which increases price, the demand for textbooks has increased because of the increase in people attending colleges. Around 30% of the adult population currently has a bachelor’s degree or higher compared to only 10% in 1970. Once again if you remember your basic economics, this shifts the demand curve to the right which also increases price. Given this captive population, how does the normal student deal with this?
The 1st line of the defense would be the prof. Having 2 girls in college, I experience their pain. What I try to do is keep costs down for the students, and I do this in a number of ways. I have been teaching statistics for over 20 years and it has not changed; it is not an exact science. As a result, I use and older edition of the textbook, which are readily available via Amazon, e-Bay, etc, which reduces the price between 50-90% depending on the seller and book condition. In addition, for some courses that do experience change, I attempt to get a customized textbook that doesn’t have as many chapters and costs less; and lastly, in some of my non-quantitative courses, I have prepared my own power points and I have told my students if they take good notes and have good attendance, they can succeed without purchasing the text. The students are doing their part too by searching for used books, e-books and renting books.
However, I feel that the ultimate villain in this case is the FTC. The Federal Trade Commission, which has been in existence since 1914, is the federal agency that is tasked with maintaining completion and truth in advertising, and I feel on a number of occasions, they have dropped the ball and failed miserably. When any two large firms merge, they must first get the approval of the FTC, and this agency has given carte blanche to every merger/buyout in this industry. During this year’s presidential election campaign, there is much talk/hyperbole about breaking up the big banks. Maybe they should be looking at the textbook industry also.
The 1st line of the defense would be the prof. Having 2 girls in college, I experience their pain. What I try to do is keep costs down for the students, and I do this in a number of ways. I have been teaching statistics for over 20 years and it has not changed; it is not an exact science. As a result, I use and older edition of the textbook, which are readily available via Amazon, e-Bay, etc, which reduces the price between 50-90% depending on the seller and book condition. In addition, for some courses that do experience change, I attempt to get a customized textbook that doesn’t have as many chapters and costs less; and lastly, in some of my non-quantitative courses, I have prepared my own power points and I have told my students if they take good notes and have good attendance, they can succeed without purchasing the text. The students are doing their part too by searching for used books, e-books and renting books.
However, I feel that the ultimate villain in this case is the FTC. The Federal Trade Commission, which has been in existence since 1914, is the federal agency that is tasked with maintaining completion and truth in advertising, and I feel on a number of occasions, they have dropped the ball and failed miserably. When any two large firms merge, they must first get the approval of the FTC, and this agency has given carte blanche to every merger/buyout in this industry. During this year’s presidential election campaign, there is much talk/hyperbole about breaking up the big banks. Maybe they should be looking at the textbook industry also.
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