Thursday, August 13, 2009

Expensive Textbooks: Part II

In my last post, I described some reasons for why college textbooks are so expensive. Basically, it comes down to marketing, and I don't blame textbook companies for pursuing the marketing strategy. It is probably profit maximizing.

But, my objective is not to maximize profit. My objective is to spread the good word of economics (I'm a utility maximizer). From my perspective, it would be great if we could offer the same material (perhaps without the expensive sheen) for free. Is such a thing possible? Would that destroy textbook innovation as we know it? Maybe, but let's consider the alternative.

Free textbooks sound like a crazy idea, but some people have written introductory economics textbooks that are priced at zero for full access to the information. For printed versions, these authors charge some money for a bound copy of the textbook, and that's how they capitalize on producing quality content. The information is free, but the printing is not.

As an example, R. Preston McAfee at Caltech has a wonderful (somewhat technical) introduction to economics textbook that is available for free. He works with Flatworld Publishing, which sells interested parties a printed version of the textbook for $11.10 (plus shipping).

Following in McAfee's footsteps (but still going a different direction), I developed my course notes into my own textbook. The full text pdf version is available here; And, if you want a bound copy, I have self-published the book at Lulu (on-demand publishing), where you can get my book for $25.

There's another way to publish textbooks cheaply: financing the textbooks with advertising. A company called Textbook Media publishes textbooks using this concept; I think it's worth checking out. In fact, Tim Taylor used Textbook Media to publish his textbook; It is being used at 150 universities. The book is free if you don't mind looking at advertisements. If you want it to be ad-free, it sells for $30 (comparable to my $25 price).

Maybe you think we're crazy in publishing our full content for free, but I think the idea has some promise. Yes, the free model has to obtain editorial support on the cheap, and that's bound to lead to some compromises, but I don't think that much will be lost in terms of quality content. From my perspective, the chief advantage of the textbook company is that they produce nice color graphics. The textbook companies are masters of formatting. They really do a great job of packaging.

If you want editorial support without paying, here's an idea: Pass your manuscript around to your colleagues, use it for a class that you teach, and frequently ask for feedback from people. Moreover, using the book for a class is a great way to work out some of the kinks in the presentation of material. The most useful editorial support comes from students anyway, and students are good at complaining about things that are confusing. The best part? They do so without paying.

Perhaps, you're skeptical. You may think that this cannot work. How can you get someone to give a good review of the material without paying them for the review? Take a parallel example. Academic economists get great feedback on their original research from other people who are interested in their work. Friends and colleagues are usually more than willing to take a careful read of an article, and they do so without charging.

In fact, the worst review of academic work I have seen was a paid review. I think the problem is that it is hard to be critical when someone is paying you. Subconsciously, most people think "Why bite the hand that feeds you, especially when it's easy to give a soft review?" And, it pays the same too. I suspect this philosophy infects textbook reviews, just as it infected the not-mentioned-by-name review. I'm not so sure that the culture of paying for reviews produces much value beyond just passing your manuscript around.

Most good economic research utiltizes "free" reviews from respected colleagues. Moreover, these academic articles and the culture behind them formed the basis for the knowledge that is ultimately assembled into textbooks. Why not try out the same model -- or a similar one -- when it comes to communicating your ideas to students who are new to the subject?

That's the idea with "free textbooks." In that context, it's not so radical after all.

2 comments:

  1. Hi Tony

    Some textbooks are expensive because some people are ready, willing and able to spend that much on them. That implies that those people put real value or utility on the "sheen" you speak of. How ideas are presented and who presents them can affect the value someone assigns to most anything. It is more a situation of definition. By definition the price of something is what someone is ready willing and able to pay for it.

    Just a thought
    Fletch

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  2. It's true that the people who actually buy textbooks on the market are "ready, willing and able" to pay the market price. It's also true that more people would be willing to pay for the same textbooks at a lower price.

    People could put zero value on sheen, and that fact would be true.

    On the other hand, I agree that people value sheen. Personally, I appreciate some sheen on the textbooks in my bookcase, and I suspect there will always be a market for it. But, it's not the primary reason people are willing to buy textbooks.

    In my experience, students would be happy to trade off "sheen" for a significant amount of money (at least $50). If the students can learn just as well with a less shiny textbook, the students would be better off.

    Moreover, I'm not sure that the right amount of sheen is selected in the market for two reasons:

    1. As search is expensive, professors pick from among the options that show up at their office door. This tends to select books with lots of sheen. These shiny books are labeled as "required"

    2. From this labeling, students derive their textbook demand. A less shiny book is of no use to the student because it is not being used for the course.

    So, textbooks are selected based (in part) on convenience by someone who does not have to pay for them. In fact, professors are paid to look at the books (see previous post). I see no reason that the student-utility maximizing amount of sheen is selected by this.

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