Thursday, August 24, 2006
Possible explanations can be broadly categorized as relating to cost factors, preferences, or market structure. ... we argue that explanations based on cost and market structure can not explain differences of the observed magnitude. We claim that price diffrences are almost exclusively demand-driven and discuss several reasons why US consumers are willing to pay so much more than their UK counterparts for textbooks. Our preferred explanation is that demand differences are the result of the different status of textbooks in the educational systems of different countries.One thing that supports that view is that for other books, the US book price premium is much smaller (30% premium for textbooks, 12% for other books.) The premium is much, much larger for science textbooks, and the premium is nearly 50% for commercial hardcover textbooks.
What this tells the authors that it's probably not cost -- most books are printed in the US, even those sold in the UK. And it's probably not us evil professors either, since faculty in the UK aren't logically any more sensitive to the cost of textbooks to students than US professors. However, a good look at syllabi in courses in other countries indicates how much less important textbooks are in teaching there versus here.
In the United States the textbook is an integral part of college education. In most courses instruction centers around a single textbook that contains most of the material, as well as exercises and practice problems. The textbook is the main reference for students and it is usually labeled as "required" for the course. In the UK, textbooks are not used in the same way. Students are usually given a list of books that are meant to be study aids rather than mandatory textbooks. Thus students feel much less of an obligation to buy particular books, meaning that willingness to pay for textbooks is lower than in the United States.If the style of education is different in two places, and one relies on the textbook as an input more than the other, is that something that should be corrected? I have found that my students are not happy about using readings and being sent to libraries for materials. Overseas, that does not seem to be a problem (my experience there being very limited, I say that with caution.) And textbook publishers are now able to create so many customizations of textbooks for faculty (which of course have zero resale) that they may be increasing the agency problem, contrary to this paper I'm reviewing.
At any rate, and as most of the other commenters from yesterday's post have noted, search engines are breaking down the ability of textbook publishers to price discriminate (preventing resale is a requirement for price discrimination to be an effective strategy.) I recommend students try out either ABE (as Marty suggests) or use the UK Amazon site. That leakage for publishers is why they are creating more customizations of texts.