The Economics of Textbook Prices


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Worth the $122.50?
Shopping for textbooks is a quarterly rite of passage at Stanford: the overstuffed bookshelves featuring row after row of enticing titles; the churning hordes of people (sometimes refered to as the “checkout line”); and, without fail, the jaw-dropping textbook prices.

The *New York Times *today has a  forum up on textbook prices, asking the eternal collegiate question, “*Must *textbooks be so expensive?”

Most of the forum’s contributors think textbooks are too expensive, on balance, and can be made more affordable. (Perhaps newly enacted legislation will help.)

Professor James Koch of Old Dominion makes an analogy:

The textbook market is like the pharmaceutical market: the people who have the most influence over what is purchased (doctors and professors) don’t have to pay for their choices. Students do.

The more students spend on textbooks, the more universities earn from their bookstore contracts.

Further, several studies indicate that most professors don’t even know the cost of the textbooks they recommend, or that this is a minor factor in their choices. This makes the demand for textbooks “price inelastic” — student buyers are insensitive to price increases.

His point, in my experiences, is mostly, but not entirely, true. Many professors were acutely aware of the high prices of books and graciously sought cheaper alternatives for their students.

Meanwhile, Bruce Hildebrand of the Association of American Publishers, defends the prices as cheap in-scheme-of-things:

The fact is textbooks are one of the smallest expenses for students, even those attending public two-year commuter colleges, according to The College Board’s 2009 report. Actual average student spending on textbooks has been flat or declining since spring ’06, according to Student Monitor, the research group.


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