Textbook Prices Have Risen Faster Than Medical Care Costs, This Could Be the Year of e-Textbooks?

College students frequently complain about the high cost of textbooks, and they have a point. As the top chart above shows, the cost of college textbooks (BLS category "educational books and supplies") has risen much higher than the overall CPI since 1978, almost 7% annually on average for textbooks versus less than 4% for all goods and services. Although not quite as high as the average annual inflation rate for college tuition (almost 8%), textbook prices have increased faster than even the cost of medical care (6%).

The bottom chart above shows annual inflation rates for tuition and textbooks since 2000, and they have been increasing in a range of about 4-10% annually, compared to the overall average inflation rate of 2.67% over that period (not shown in chart). And since January 2007 the inflation rate for textbooks has exceeded the inflation rate for tuition for 30 consecutive months, confirming the general consensus among students (and faculty) that the affordability of textbooks has noticeably worsened over the last several years. And I suppose it's also the case that rising tuition is partly offset with financial aid, whereas rising textbook prices have to be absorbed more directly by students and their parents.

For example, Greg Mankiw's "Principles of Economics" (5th edition) has a list price of $210.95 and an online price of $175.79 at Barnes and Noble. In other words, a college student today could spend more than $1,000 on textbooks (at the list price) per semester for 5 courses! And the list price of today's textbooks are almost as much as the cost of tuition for a 3-credit course at a community college ($254 at Mott Community College), although Mankiw's "Principles of Macroeconomics" sold separately (without the micro chapters) has a list price of "only" $158.95, and sells online for $133.50.

Is there any hope to make college textbooks more affordable, or will they continue to skyrocket? Actually there is. From today's Chronicle of Higher Education (paid subscription may be required):

Publishers say they just want to offer customers choices, and appeal to today's students, who have never known a world without laptops and the Internet. It's worth noting, though, that the publishers stand to benefit from the format switch. Today many students sell their books at the end of the semester, and publishers don't share in that revenue. They have designed their e-books so they cannot be resold; in many cases, the digital files self-destruct after a set period. (For CourseSmart books, most files vanish after 180 days.)

For example, the eTextbook version of Mankiw's "Principles of Economics" is available at CourseSmart for $105.49 for a 180-day subscription (50% of the list price), and Principles of Macroeconomics is available for $79.49 (about 50% of the list price). There are two formats available: a) the online version which can be accessed from any computer with an Internet connection, or b) the downloadable version, which can be accessed from one computer only, without an Internet connection. In both cases, the subscription length is 180 days.

This seems like a sensible alternative, especially for students who sell their textbooks back at the end of the semester and end up without the textbook in either case (buying a textbook and selling it back, or buying an eTextbook). And for those students who would like to build a library of textbooks, they can buy older editions of any textbook for almost nothing on the used market. For example, there are currently 432 used copies of the 3rd edition of Mankiw's "Principles of Microeconomics" available for sale on Amazon starting at $2, which is 50% less than the shipping cost of $3.99!