Are textbooks overpriced? This newspaper story looks at the issue.

Rep. David Wu (D-Ore.) in November introduced a bill requiring to General Accounting Office to investigate the high price of college textbooks and whether publishers are marketing the same books at lower prices abroad.

Deputy Gov. Bradley Tusk said Blagojevich wants the Board of Higher Education to look at whether the publishing industry has been engaged in price-gouging or other monopolistic activity. If the answer is yes, legal action may be considered, he said.

The story also mentions the B-Word, talking about the way that CD-ROM’s and study guides are tacked on to the books themselves.

Textbooks are like prescription drugs. On a benefit-cost basis, they are cheap. However, comparing price to marginal cost of production, they are expensive, because most of the cost of producing a textbook is up front. The writer needs to obtain the knowledge and develop the examples to convey that knowledge. The publisher must cover the cost of funding projects that fail with profits on those that succeed.

I think that nowadays it would be more efficient for professors to produce single chapters than entire textbooks. When you write an entire textbook, you inevitably get into areas that are not your comparative advantage. In fact, you are forced by the market to get into topics that you don’t even think are worth covering.

For Discussion. Do think that a company that published texts in smaller units, corresponding to a few weeks of study rather than an entire semester, could offer price/quality combinations that would take market share away from the traditional textooks?