Why This Matters

“I can’t wait to spend over one thousand dollars on textbooks this year,” said nobody, ever.  In the 2013-2014 school year, the average American college student spent $1,137 on textbooks (Behr). Do we have your attention now?  This number has risen 82% in the last decade, and a whopping 812% in the last 36 years. These numbers represent a major problem for students, especially considering Debt.org blogger Cecillia Barr’s point that books are just another cost adding to the general debt incurred by collegiates.  Students across the country are in search of ways to save money on overpriced textbooks.  If you’re reading this, then you too are probably looking for an alternative solution to buying that $375 textbook, one which you probably won’t open more than a handful of times all semester.  Luckily for us, there are ways around dropping a cool grand on your books. 

The first step towards solving this problem is to understand it. The textbook market can be broken down into the supply side and the demand side, each of which involves multiple parties: the author, publisher, distributer, university, bookstore, professor, and students. You can already see how complicated this issue is. On the demand side, one of the major problems is that the individuals who choose the required textbook (the professors) are not the ones who need to buy and use them (the students). Central Washington University Economics Professor Robert Carbaugh compares this to the relationship between a doctor and his patients; the doctor will always prescribe the best medicine available, and the patient is more-or-less forced to buy it, regardless of cost, or continue to suffer their symptoms. Students have the fear that if they do not buy the text, they will perform poorly on the homework, exams, and other work. Unfortunately, this has led to the market becoming “price inelastic”. What this means is that students are not sensitive to changing prices; for example, a 10% increase in price has been measured to have as little as a 2% decrease in purchasing (Koch). To make matters worse for college kids, the market has become an oligopoly in the last thirty years, dominated by only a few large companies. This concentration further forces students to continue paying whatever is asked for their books. 

Surely, then, the problem of high prices originates with the publishers? Not entirely, according to Dr. James Koch of Old Dominion University, who did a study and created his own proposal as to how to alleviate the price burden. Bookstore wholesalers also form an oligopoly, and authors collect royalties on every copy sold. In the case of faculty authors, this can seem particularly unfair. Universities often profit when their professors or bookstores do, and the tendency to be unwilling to buy back used books takes away one of the students’ options for lessening the overall cost. Carbaugh claims that publishers and authors are already concerned by used book markets without them expanding even more.  One more practice is to only offer books in bundles which can include such things as solution manuals, test banks, transparencies, resource CDs, study guides, website access, and online homework, all non-optional and all further hiking the price. The web-based resources can also make used textbooks entirely useless, since a one-use access code is often required. The problem of textbook cost comes from multiple sources (as shown in the below figure from Carbaugh), so our proposed solution is also multi-faceted.

Divvying Up a $100 Textbook

This chart, from Carbaugh, shows exactly what goes into a $100 textbook.  The first step towards trying to solve a problem is to understand it!

Past Solutions

With today’s seemingly endless technological advances, it’s no wonder electronic books (“e-books”) are becoming such a hot commodity.  E-books can be purchased for use on laptops, iPads, and Kindles.  Many e-books cost substantially less than print texts and can be downloaded in a minute or less (Barr).  However, not every textbook has an electronic counterpart and these e-books cannot be sold back to the supplier.  Nevertheless, hundreds or even thousands of e-books can be stored on a single device at a fraction of the cost of print.  Online rental programs, too, are starting to change the way students use textbooks.   PackBack, a pay-per-use eTextbook startup, offers online books to users ranging from $3-$5 for a rental period of 24 hours (Lazare).  If you’re only looking to use the book to cram for an exam, this is the perfect system for you.  Currently, there are over 15,000 users of PackBack.  Similarly, firms like BookRenter and Chegg offer book rentals varying in price according to how long the book will be needed.  One text with a list price of about $180, for example, was quoted at one third of the price, $60, for a semester-long rental on BookRenter.com (Cox, Matthews & Associates).  Boundless is a new website that is aiming to be in the same mold as Wikipedia, but for textbooks.  E-book downloads are also available there for roughly $20, a fraction of the cost for a print textbook (Keohane).  Online libraries were unheard of until recently.  “In 2012, the Bill and Melinda Gates Foundation began to help fund Rice University’s initiative to provide online textbooks for five of the most-attended college courses” (Barr).  Lastly, many college bookstores offer “buy-back” programs for students that cannot find a way around buying the actual textbook.  When the semester comes to an end, students have the option to sell their textbooks back to their college bookstore.  While bookstores often buy back textbooks at a fraction of the original price, it is still a way for students to cut down on how much they spend towards books.

The Snags

So why have none of these solutions really been implemented? Well, there a few reasons. When it comes to the animal of the used book market, any sales go directly to the bookstore, or else to the previous owner if you’re buying directly from them. The problem with this is that neither the publisher nor the author get any of the money from the transaction. The used book market takes them out of the equation, so they must make that money up somewhere. The publishers estimate how many sales they will lose on the used book market, and then up the price of new books to make up for this difference.  A lot of people like to point fingers at publishers, then, and think that the solution should start with them lowering prices or releasing new editions less frequently.  As it is pointed out in an article by digital media consultant manager Joseph Esposito, though, it is a little naive to think that a publisher wouldn’t come out with a new edition solely to improve the used book market and therefore hurt themselves!  Once a newer edition is in print, of course, no store will be willing to buy back the old one.  But the other flaw with blaming just the publishers is that book sales aren’t just a way for them to make money, or an extra cost for students, but a source of income for the schools, and the writers (often times professors themselves). The schools will buy used books at 15 to 25 percent of what they cost new, and then sell it for a much higher price (Barr).  Another, cheaper alternative, e-books, only made up about four percent of textbooks sales in 2011, and they too hurt the other parties involved in the making of text books (Barr). 

In regards to PackBack, the relatively new website will take a while to have any real effect on the marketplace.  The site currently has about 2500 titles, with more being added every day.  While this is impressive, the site needs to do a better job of advertising itself to really get their solution off the ground.  The other major component is to convince publishers to join their service, but why should they?  What would publishers have to gain from changing their ways, helping students get around the high prices that they themselves set?  The profit gained from PackBack rentals is hardly likely to add up to the amount they would have gained on the traditional market. 

In short, the methods commonly adopted by students to get around high prices often result in those same prices getting raised to cover the difference, and other temporary solutions are much the same.  Because of the dynamic, interwoven nature of the textbook market, any move made to benefit one group would likely hurt the other parties involved.