The Economics of Textbooks

Yglesias makes a big mistake (0.00 / 0)

He writes:

textbooks seems like an unusually promising case (for open-sourcing). Not just because textbooks have an unusually large extra monopoly cost, but because they're not really a consumer product.

Actually, that looks like two mistakes.  Though there is a some degree of self-referential price fixing involved in the text market, it is a far cry from monopolistic.  And the bigger mistake is to think that textbooks aren't a consumer product.  Yes, they most certainly are, unlike most of the costs of a college education.  (Think about it for a second.  Most college curricula require, implicitly or overtly, a computer to complete the series with success.  Would anyone care to claim that computers are not a "consumer product"?)

To be honest, I see the economy of textbooks to be the economy of scapegoating, in keeping with Kailey's law of consumer good will and inverse need. (KLoCaIN:  the degree to which one is willing to spend on an item is inversely proportional to the degree to which they feel they 'need' that item.)  Most parents and students have little objection to fees supporting Athletic departments, large and expensive gymnasiums, campus entertainments and marching bands (not to mention and adequate monthly beer budget.)  But textbooks, required as they are, as seen as an onerous burden, one which should be socialisticly provided.  Why is that?

The return on investment for textbooks is arguably huge comparatively to many of the services that colleges provide.  But, proceeding from the assumption that textbooks are needed (and yet somehow unnecessary) it's very easy to think that Professors (who gain a not altogether dismissable income from publishing) will jump aboard the open source bandwagon.  They probably will ... as long as their current or perceived future income is shifted to the taxpayer and tuition payer, or taken from those who also work to benefit students (janitors, copy people, IT people, your local neighborhood bookstore ...)

This is not an easy conundrum.  But the ultimate goal is to decrease total educational cost while increasing the benefit to the purchaser.  Shifting that cost to tax-payers as a transparently hollow move to save little Johnny's parents a buck while they buy his degree seems like a great way to a) remove a valuable tool from actual education, b)  further enable the Wikepedia generation and dumb America even more, and c) piss me off.

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by: Rob Kailey @ Mon Jan 12, 2009 at 22:37:45 PM UTC

A couple things in response (0.00 / 0)

First, I'm not entirely sure what Yglesias means by a consumer product, but I suspect he means something similar to what I discuss with the third-payer problem. Computers and textbooks are very different. Non-college-students buy computers in large numbers (numbers that rival students' purchases; also most campuses have sufficient computers to realistically allow a student not to own their own). Non-college-students do not buy college textbooks in numbers to rival students, which is why bricks and mortar bookstores typically only carry textbooks if they are college bookstores.

The return on textbooks is big. I don't think anyone here is saying textbooks are bad or mediocre. The current system may in fact be worth protecting on the basis of quality. The third payer issues theoretically remove price somewhat from the discussions of comparison and allow for quality to become more important. Given the overall scope of cost of books relative to other expenses, maybe it is reasonable (although, frankly, books are almost universal a larger line item per student than the athletic fees or student activity fees).

My argument for socialism is really just one of aligning incentives. I don't think of it as shifting the cost to taxpayers as I pair it with a tuition hike. Theoretically aligning incentives needs to be done in other parts of higher education in this country as well. I think this story is especially interesting in that regard.

Finally, Rob, I don't think either Matt or I are calling for Wikipedia to take over textbooks. Something can be open source without being powered by a Wiki. Textbooks, especially for 100 level classes, seem like a particularly attractive option for open sourcing in part because of their widespread need and the relative lack of variation from book to book.

Plus, open sourcing the things would allow professors to choose the one they like but tweak it to fit their lesson plan over the years.

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by: Matt Singer @ Tue Jan 13, 2009 at 16:33:27 PM UTC

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