The Unsustainable College Textbook Bubble
As Angus comments: "These days, given that you could make yourself a pretty good free principles text just by downloading relevant Wikipedia entries, I don't see how these rents can be sustained over the long run (I am aware that not all or perhaps not even a majority of the rents are going to the authors)."
In other words, there's an unsustainable college tuition textbook bubble that makes the recent "housing bubble" almost unnoticeable by comparison (see chart above), and those rents, just like 2007 home prices or 1995 AT&T long distance charges, probably can't be sustained.
11 Comments:
I will be squirming in delight when all these worthless textbook publishers and colleges are put out of business in the coming years. :) I'm sure Mankiw's book is better than most and in his case he might actually make more money in the coming online market for curricula, but most of the rest won't. It's going to be a lot of fun watching them get put out of business. :D
Many professors will make minor revisions to a book to force the purchase of a new book & destroy the used book market.
The most dysfunctional organizations can be found on the college campus. The most dysfunctional economic value propositions are found within the same organizations.
Mankiw has a pretty strong incentive to crank out revisions on a regular basis. If the information contained in the graphic at this post holds, assuming a $191.16 sales price per book, Mankiw would pocket $22.37 for each copy sold.
The chart shows the "textbook bubble" has been accelerating instead of bursting.
The book is not only 888 pages of valuable and accumulated information appropriate for Econ 101, it's presented as a work of art.
It's a luxury good that represents the U.S. higher education system, where even average universities are high quality.
Greg Mankiw's econ textbooks are routinely #1 bestsellers. If professors wanted to save their students some $ then, why not require the previous edition of Principles of Economics (Edition 5)?
Barnes and Noble will rent an electronic edition for $114.99. The principles are probably very close to edition 6 but at half the price.
The chart shows the "textbook bubble" has been accelerating instead of bursting.
PT, blow off top?
What sort of arrangement does Mr. Mankiw have with the publishers? I could envision a business model where Mr. Mankiw sells or rents electronic versions through his site for $50. He makes a better profit and students get the latest versions cheaper. Publishers can stick to their murder mysteries and sappy romance novels and we'll all do better, yes?
What sort of arrangement does Mr. Mankiw have with the publishers?
He got a million buck advance for the first edition of the book. While the book is OK but there are problems with his seventh, eighth and tenth principles and Mankiw is not very good at stressing the idea that all value is subjective.
I think anytime you have the government subsidizing a market, and guaranteeing loans in a market, you will get higher prices. Look at housing, healthcare, and education.
I think the prices for his older editions are quite interesting: $100 for 5th ed; $40 for 4th ed; $25 for 3rd ed.
Is the latest really worth that much more? Would a value-oriented college thrive by using 2-year old textbooks?
People should start using free Internet learning materials.
This free Economics I and II Tnternet course lets students choose from about five.
http://www.businessbookmall.com/Quick%20Notes%20Economics%20Course.htm
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