Textbook Prices: It’s Enough Already
The idea for this piece came to me as I was shopping around for the lowest price for the textbook required for my Intermediate Accounting class. The book is aptly titled, Intermediate Accounting. I was shocked by just how much a copy of the book would cost me. Even used, it was unbelievably expensive. I ended up purchasing it from a friend who had already completed the course, for a small fortune. I had been hearing complaints about the cost of textbooks for years, but because my own books last year were not terribly expensive, I never gave it much attention. After doing some research, I realized how absurd the high-price textbook craze really is.
The American Enterprise Institute, a leading Washington, D.C. based think-tank, found that the price of college textbooks is up 812% since 1978. Comparatively, the price of medical services is up 575% over the same period, while new home prices are up 325%. A few years ago, Congress and the American people became so fed up with the rising price of healthcare that the Congressional Democrats rammed the Affordable Care Act through Congress to fix the system. The impact of the Affordable Care Act is a discussion for another time. But the broader point, about fierce debate and swift Congressional action, still stands. Where’s the same impassioned debate about textbooks? College debt is the fastest rising category of debt in America today, outpacing mortgage debt, auto loans, and credit card debt.
A large part of the problem is that textbooks are assigned by professors. Professors evaluate textbooks on quality and not price. They don’t pay a dime for required materials. The medical industry has a similar problem. Physicians routinely prescribe expensive drugs when equally effective and cheaper generics are readily available. They just don’t think about the price. Professors frequently rationalize their ignorance by assuming students can sell the book to the next student or that a particular course is just so important that the book is worth keeping forever. Indeed, students do sell their books to the next person, and some books certainly are worth holding on to.
But I suspect that cheaper books, or going one or two editions back in the same book, will not impact students’ learning in any significant way. Frequently, new editions change the cover art, correct the one comma splice in a footnote on page 1347, and change the numbering problems in the back of each chapter. In my aforementioned accounting book, there are two pages at the beginning of the text listing the changes in the new edition. In some chapters, the only noticeable change is the story at the beginning of the chapter. Are the new stories proven to teach the concepts better than the old stories? If not, why do I care? If yes, show me the data. I have compared a few of the books I have to the immediate previous edition and rarely have I found differences of great significance. Here in YU, and I would venture to guess most other universities, different professors teaching the same course require different editions of the text. Yet no evidence exists showing that students with the newer edition, or the more expensive edition, learn the material any better than students with the cheaper edition. Indeed, the evidence suggests that pricey textbooks are actually a detriment to learning. A study by the U.S. Public Interest Research Group showed that 65% of college students have decided not to buy a book because of the price. 48% of students admitted to picking one course over another because the required book is cheaper.
Slate.com wrote: “Calculus hasn’t changed much since Newton and Leibniz invented it in the 17th century.” Slate then goes on to note that Stewart’s Calculus is in its 7th edition and has a list price of $245. According to the Wall Street Journal, Jim Stewart, the book’s author, lives in an 18,000 square foot, five floor, $24 million house with its own concert hall. Slate also references former top economic advisor to President George W. Bush and Harvard economics professor N. Gregory Mankiw who wrote a best selling textbook on economics. Slate doesn’t provide specifics, but notes “Politics may have made Mankiw famous, but his book—list price: $293.95—has made him a very wealthy man.”
Publishers claim that textbooks are so expensive because of the production costs. According to Vox.com, a publishing industry consultant said that the average cost of developing a single book is $750,000. The consultant in question does not know how those costs are broken down. Once the book is developed, the cost of each updated edition should – theoretically – sink. After the first few runs, particularly for the most popular books, a large portion of the development expenses should be recovered. Projected sales for a book of moderate popularity is about $200,000 a year, so with an average production cost of $750,000 initial production costs are recovered after a little less than four years. Most of the initial costs are also one-time fees such as graphic and art design. As noted earlier by Slate, most of these subjects don’t actually change, but only how they are presented. What happened in 1862 is no different in 2009 than in 2014. Sometimes, new editions are necessary for books in certain fields to reflect significant research developments or changes in the law or regulatory structure of a particular field. The number of updated editions truly necessary for any given textbook can likely be cut in half.
Zachary Crockett, a writer based in the San Francisco Bay area, used to be an editor at Cengage Learning and at Pearson, major players in the publishing industry. Writing on the Priceonomics blog, Crockett asserts that textbooks are “less about educating the masses and more about exclusivity and profitability.” Crockett goes on to break down the publishing expenses for a popular textbook. Crockett says that the authors of the book get a 15% royalty per book sold for this particular book, and that 11-15% is normal with better selling authors getting more. The single biggest expense of production is editorial, accounting for about 30% of production costs. About 22% of the wholesale price is the publisher’s profit. Crockett goes on to say: “Textbook publishers realize the large profit margins from new editions, which come out every 2-4 years, are minimally updated, and are sold at the same price. Generally, a new cover is designed, copy errors are fixed, and a few sections may be revamped. The investment required for subsequent editions is miniscule.”
It is reasonable to conclude that textbook publishers and authors are simply greedy. Our professors should consider their role in the fleecing of America’s students and think twice about the necessity of that $300 dollar revised 23rd edition without the comma splice. The system only works because we allow it to. As students, we should remember what Ludwig von Mises said: “The real bosses under capitalism are the consumers. The companies and entrepreneurs are ultimately at the whim of the consumers, for whom they serve.”