Friday, September 18, 2009

Efronomics and Textbook Cartel

Despite what most students think, some professors actually care about the textbook costs for their class. We care because we want the students to read the text, which they can't do unless they buy it and the higher the price the less likely they are to read it.

I generally teach two classes Economic Development and Introduction to Macroeconomics. For Development I assign three paper back that can be purchased on Amazon for about $10 each used. For intro to macro, I have students use an online homework system called Aplia, which for $80 also includes an online copy of the book. I think Aplia does a good job running the site as my students have few technical glitches and the homework problems are solid. I would like my students to get a better deal.

I could shop around, I think I will next year. But I'm just one professor with 50 intro students, I'll be subject to the market going prices, which is probably $80 if I want an online homework system (which I do).

I was thinking about all of this when I read an entry in Seth Godin's blog on high school musicals (the actual kind not the movie staring Zac Efron). He said his local high school paid $3,000 to stage Grease. He believes the high price was because the High School had little bargaining power when getting the rights to a musical, since few companies option the rights to well known musicals. His suggestion was to form a cartel of high schools that would option musicals. The cartel would be a set of a few hundred school that could use their size to bargain for the rights at discounted prices. My guess is 100s of schools each year put on Grease, but is that really that preferred to say Joeseph and Technicolor Dream Coat.

Back to textbooks. I wonder if universities are doing this. What if the Towson Economics department which teaches by my rough estimates 600-700 student in Intro to Macro each semester got together and tried to bargain with a company for exclusive rights to provide an online homework system. If a conservative estimate is 1,000 students a year in intro to macro and 1,000 in micro, we could be talking 2,000 students at $80 a pop we are a $160,000 in value.

Of course getting faculty members to agree on anything is always difficult let alone the same textbook. But even forming a cartel of 4 or 5 faculty may be large enough to get some bargaining power.



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2 comments:

Josh Hall said...

Seth,

Lots of online universities do this. For example, I know of one college that sells the fact that tuition includes ALL books. As a result, they work hard to keep textbook costs down, including making contractual agreements with publishers to minimize edition churn.

Britt said...

Yeah, some faculty are actually a little more willing to sacrifice complete classroom independence for the Common Good. :) We do teach all our Physics 101/102 classes out of the same book to avoid confusion and to make it easier for the book store to stock the book (and used copies).

I feel an added tension in the textbook market since my husband works at the book store. Luckily our book store is part of the much larger Barnes & Noble College chain, which presumably gives them some leverage—but not enough, obviously, to compete with online booksellers.

While I can't in good conscience say to my (sometimes economically disadvantaged) students "You should not buy that book at a 30% discount from Amazon! Pay full price at the bookstore!" at the same time I see the value of having a local, bricks-and-mortar college book store. So I do encourage students to buy there.

I am even more motivated to keep Turtle Creek in business because it is not only Beloit College's store, but also the City of Beloit's ONLY bookstore (which, really, is sad.)