Needless to say, I think some of the posters there have a less-than-complete understanding of how textbook pricing works.

On a really off-topic but more positive note, hurrah to the Morgridges for putting real money into a place where it’s badly needed. To quote from here: “wow!”

Vice Provost Aaron Brower was kind enough to point me to a link to the completed report of the UW-Madison Committee on Textbook Costs:

http://www.news.wisc.edu/news/docs/UW-MadisonTextbookCost.pdf

Here is the associated press release:

http://www.news.wisc.edu/releases/14154

My initial reaction is that the report makes a number of useful observations and suggestions, but that these suggestions, if implemented, will have only a marginal impact on textbook costs.

For example, I do not believe that giving students an extra 2-3 weeks to shop for textbooks will allow them to find many bargains. The total supply-demand equation is not changed by this, it is merely spread over a larger window in time and space. Worldwide variations in book prices are not really all that great, and shipping costs are very high for books purchased from abroad. While such a policy might indeed put downward pressure on local bookstore prices, it will exert significant upward pressure on the prices of online vendors of new and used books. As I pointed out in my article above, there were 75 copies of Jackson available for purchase “new and used” through Amazon Marketplace, and none was under $56. This is still approximately 10 times the cost of the physical printing and binding of the book. And because it is the copyrighted content that is being paid for, not the paper and ink, a greater reliance on e-books will also do little to solve the problem.

There are two fundamental facts that MUST be explicitly acknowledged and exploited, in my opinion, in order to have a meaningful impact on textbook prices:

1. publishers have a HUGE incentive to get their books adopted by instructors of courses;

2. publishers have HUGE latitude in how they price those books.

The textbook trade operates under very different conditions than the general book trade: risk is low, discounts to college bookstores are small (25% vs. 55%), returns are low, marketing costs are low, and downward pressure on prices is low. All these together mean that profit margins (for publishers) on successful titles are very high in the current environment. The two key facts highlighted above are the direct result. We need to find a way to pressure publishers to accept a smaller profit margin for textbooks.

Note also that, precisely because wholesale discounts to college bookstores are typically small (25%), it is the publisher, not the retail outlets, who has the greatest control over prices. Downward pressure on prices from retailers worldwide can only achieve so much if they’re all getting a particular title from the same source. In this respect, textbook prices fall in the same category as gasoline prices and prescription drug prices.

http://badgerherald.com/news/2007/12/04/regents_examine_book.php
http://www.dailycardinal.com/article/1420
http://www.news.wisc.edu/14503
http://www.stateline.org/live/details/story?contentId=235596

All of the above correctly identify the symptom, and some discuss bandaid solutions, but none, in my opinion, shows any recognition of the underlying disease, which is what I tried to examine with my article.

Waiving sales tax, for example, can only have a marginal impact on total cost, and it offers no disincentive to publishers to simply fill whatever small breathing space is temporarily created.