UCLA Finance Professor Goes Up Against College Textbook Cartel and Offers His Textbook for Free
The book is now coming out in the second edition at a new price: FREE for the online readable-only version (no printing), and $60 for the 736-page softcover print version through Amazon (available in mid-December). According to the author "It will not be updated every two years for the sake of suppressing the resale market," which has become the new anti-consumer (student), anti-competitive industry standard.
I've posted before about the unsustainable "college textbook bubble" (see here and here and see chart above), and Professor Welch's approach is one example of how that bubble is now starting to burst. As Kevin "Angus" Grier commented on KPC in February:
"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 [textbook] 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)."
Thanks to Professor Welch, I'm starting to hear a "giant hissing sound" of the unsustainable, inflationary college textbook bubble starting to deflate, and I encourage other professors to join in his efforts to challenge the college textbook cartel.
19 Comments:
Hmmm. I was just asked a month or so ago if I might write a college textbook... But I was just too busy trying to finish my current classes. (Taking, not teaching this time.)
Frankley, I'd like to see something like Amazon's "print to order" format used for textbooks on a regular basis, where the author(s) get paid directly for their work, minus the printing operation/services charges. It makes a lot more sense for the relatively small print runs of text books.
Thanks for writing about the textbook bubble. The answer to overpriced college textbooks is BVT Publishing. Here is a link to their principles text: http://tiny.cc/nqpk3 . OK, it's not free, but $19.95 for the e-book isn't too shabby compared with Mankiw et al.
Disclosure: I wrote it. I confess to shameless self promotion. But it really is on topic.
For years, Profs have been making minor revisions to their books, forcing students to purchase a new book with the "latest revisions".
The student is still not viewed as the customer at the academy. The academy view the producers (profs) as the customer.
The academy is a great example of an unhealthy and dysfunctional organization.... almost as bad as the airline industry, where internal competition consumes more resources than attempting to beat your external competition.
I'm curious about something here.
If a person can create their own PDF and/or self-publish...
then why are publishers like Prentice-Hall still publishing text books?
With the advent of Adobe Digital Edition and the ability to "check out" E books from the library - why are we still dealing with printed books from traditional publishers?
We have virtual schools now and it appears that we'll have electronic textbooks sooner or later...
makes me wonder what will happen to bricks & mortar schools...
Talk about inflation.
My uncle told me that when he went to Central Michigan in 1953, his tuition, books and fees cost $100/semester.
While in college, he worked 40 to 50 hours per week at a Gulf station in Mount Pleasant, MI for $1/hr.
Working at a gas station, he was able to:
1. Pay for college
2. Pay his room and board
3. Have money left over to send home to his parents.
This is impossible in today's world.
I wonder if it is something about corporate finance - my professor Damodaran (at NYU) did the same when I was in his class in 2007.
Bob wright says: "...This is impossible in today's world."
You likely can get a better education cheaper at a community college today.
Affluent Americans are at least partially responsible for fueling the college boom (much of America's middle class is moving into upper classes, while poor immigrants are moving into America's lower classes):
Growth in the
Residential Segregation
of Families by Income,
1970-2009
The proportion of families living in affluent neighborhoods doubled from 7 percent in 1970 to 14 percent in 2007.
Likewise, the proportion of families in poor neighborhoods doubled from 8 percent to 17 percent over the same period.
Western Europe's class structure today is likely much like America's class structure in 1970.
The U.S. in 1970 had a large middle class with a small upper class and a small lower class.
Today, America's two highest classes: "Affluent" and "High Income" are roughly equal in size to the "Poor" and "Low Income" classes, and also equal in size to the "High Middle" and "Low Middle" classes.
i.e. all six income classes in America have become more equal in size.
I guess, you can say income equality improved in America from 1970-2007, since all six income categories became more equal :)
Peak Trader,
You seem to be writing about income classes and neighborhoods while explaining the rise of textbook costs.
Does moving to a gated community drive up the price of texts?
The way to drive down text costs is renting e-books and withdrawing from the physical text model.
Greg Mankiw can get more royalties from the downloads of his best selling Econ. texts, than his physical books, because of greater accessibility.
Yes, free is disruptive (duh) but is it the best value in learning?
If you offer a government subsidized loan at a relatively low rate that doesn't have to be paid off for more than 20 years to pay for college books, it should be no surprise that they routinely cost well over 100 bucks. It will get worse as long as we continue to allow that nonsense.
Not only college as I think my almost 60 year old high school algebra textbook should still be in use.
Not only college as I think my almost 60 year old high school algebra textbook should still be in use.
There's already several shifts in college textbook and information delivery. A lot of textbooks today have an online version which typically costs a small % of the physical version. Plus students will always find a way to cheat at this game by having one person purchase the code, and share it with others.
Also, many professors don't use textbooks when the information is publicly available, or available through a third party like HBS. Most MBA classes, for example, don't use textbooks. Most professors will give you cases for free, or for a small fee (which any self-respecting student will figure out how not to pay). Same goes even for technical subjects, like calculus
And of course, there's a very healthy aftermarket for used textbooks.
In the end, calling something a "bubble" implies that it is overpriced. But the driver of higher costs in this case is lack of better alternatives.
Buddy says: "Does moving to a gated community drive up the price of texts?"
The proportion of high income and highly educated Americans increased.
A student from a high income and highly educated household, and with high scores and GPAs, will tend to go to a top tier college, regardless of the cost.
Given that students are seeing double digit tuition increases at universities such as UCLA, as public funds dry up, this is exactly the kind of thing that can keep overall costs for college students under some control!
More instructors should self-publish their textbooks. It would help students with rising tuition costs. Check www.bookstep.com, they fully support those professors who want to do just that.
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