US

Textbook Prices

Question A:

Most college professors who assign textbooks would not be able to guess, within 10% of the actual figure, the retail price that their students pay for new copies of those books.

Responses weighted by each expert's confidence

Question B:

Since students can resell college textbooks or rent electronic versions, the net burden on students is substantially lower than retail prices for new textbook purchases would suggest.

Responses weighted by each expert's confidence

Question C:

Even though the professors who select textbooks are different form the people who pay for them, the price of new edition college textbooks reflect classic forces of supply and demand.

Responses weighted by each expert's confidence

Question A Participant Responses

Participant University Vote Confidence Bio/Vote History
Acemoglu
Daron Acemoglu
MIT
Uncertain
1
Bio/Vote History
Alesina
Alberto Alesina
Harvard Did Not Answer Bio/Vote History
Altonji
Joseph Altonji
Yale
Agree
4
Bio/Vote History
Faculty will know what their university book store charges but will not know about foreign editions
Auerbach
Alan Auerbach
Berkeley
No Opinion
Bio/Vote History
Autor
David Autor
MIT
Strongly Agree
8
Bio/Vote History
Baicker
Katherine Baicker
University of Chicago
Agree
1
Bio/Vote History
Banerjee
Abhijit Banerjee
MIT Did Not Answer Bio/Vote History
Bertrand
Marianne Bertrand
Chicago
Agree
3
Bio/Vote History
Brunnermeier
Markus Brunnermeier
Princeton
Strongly Agree
8
Bio/Vote History
Chetty
Raj Chetty
Harvard Did Not Answer Bio/Vote History
Chevalier
Judith Chevalier
Yale
Uncertain
8
Bio/Vote History
I have not seen a recent survey. I am reminded to list the price of the texts on my syllabus by the person in charge of HEOA compliance.
-see background information here
Currie
Janet Currie
Princeton Did Not Answer Bio/Vote History
Cutler
David Cutler
Harvard
Agree
4
Bio/Vote History
Deaton
Angus Deaton
Princeton
Uncertain
1
Bio/Vote History
Duffie
Darrell Duffie
Stanford
Agree
6
Bio/Vote History
Just a guess, based on my own experience.
Edlin
Aaron Edlin
Berkeley
Agree
6
Bio/Vote History
Eichengreen
Barry Eichengreen
Berkeley
Agree
5
Bio/Vote History
Einav
Liran Einav
Stanford
Agree
6
Bio/Vote History
Fair
Ray Fair
Yale
Agree
5
Bio/Vote History
Finkelstein
Amy Finkelstein
MIT
Agree
2
Bio/Vote History
Goldberg
Pinelopi Goldberg
Yale
No Opinion
Bio/Vote History
Goolsbee
Austan Goolsbee
Chicago
Uncertain
1
Bio/Vote History
Greenstone
Michael Greenstone
University of Chicago
Agree
3
Bio/Vote History
Hall
Robert Hall
Stanford
Uncertain
1
Bio/Vote History
I'd run a survey if I wanted to know
Hart
Oliver Hart
Harvard
Agree
7
Bio/Vote History
My guess is that most pick what they think is the best book (or, of course, their own book) without regard to price.
Holmström
Bengt Holmström
MIT
Agree
7
Bio/Vote History
Hoxby
Caroline Hoxby
Stanford
No Opinion
Bio/Vote History
I am not aware of any data on this question so I would just be guessing.
Hoynes
Hilary Hoynes
Berkeley
Agree
5
Bio/Vote History
Judd
Kenneth Judd
Stanford
Agree
8
Bio/Vote History
Kaplan
Steven Kaplan
Chicago Booth
Agree
4
Bio/Vote History
Kashyap
Anil Kashyap
Chicago Booth
Agree
3
Bio/Vote History
Based on asking a few people what they thought a basic principles book costs. Most shocked to learn it is well over $200
Klenow
Pete Klenow
Stanford
Agree
5
Bio/Vote History
Levin
Jonathan Levin
Stanford
Agree
4
Bio/Vote History
Maskin
Eric Maskin
Harvard
No Opinion
Bio/Vote History
Nordhaus
William Nordhaus
Yale
Agree
8
Bio/Vote History
Saez
Emmanuel Saez
Berkeley
Uncertain
4
Bio/Vote History
Samuelson
Larry Samuelson
Yale
Strongly Agree
8
Bio/Vote History
Scheinkman
José Scheinkman
Columbia University
No Opinion
Bio/Vote History
Schmalensee
Richard Schmalensee
MIT
Agree
5
Bio/Vote History
Seems right to me, but only based on my own experience.
Shapiro
Carl Shapiro
Berkeley
Agree
7
Bio/Vote History
Shimer
Robert Shimer
University of Chicago
Agree
4
Bio/Vote History
Thaler
Richard Thaler
Chicago Booth
Uncertain
1
Bio/Vote History
Need data to answer.
Udry
Christopher Udry
Northwestern
Agree
3
Bio/Vote History
Since we have begun putting prices on our syllabi, it's become more likely that we would pass this test.

Question B Participant Responses

Participant University Vote Confidence Bio/Vote History
Acemoglu
Daron Acemoglu
MIT
Agree
4
Bio/Vote History
Alesina
Alberto Alesina
Harvard Did Not Answer Bio/Vote History
Altonji
Joseph Altonji
Yale
Agree
8
Bio/Vote History
Auerbach
Alan Auerbach
Berkeley
Agree
7
Bio/Vote History
Autor
David Autor
MIT
Agree
8
Bio/Vote History
Baicker
Katherine Baicker
University of Chicago
Agree
2
Bio/Vote History
Banerjee
Abhijit Banerjee
MIT Did Not Answer Bio/Vote History
Bertrand
Marianne Bertrand
Chicago
Agree
3
Bio/Vote History
Brunnermeier
Markus Brunnermeier
Princeton
Uncertain
8
Bio/Vote History
Chetty
Raj Chetty
Harvard Did Not Answer Bio/Vote History
Chevalier
Judith Chevalier
Yale
Agree
10
Bio/Vote History
Yes, of course the fact that one can (often) sell the new book back helps, but many students skip buying the textbook.
-see background information here
-see background information here
Currie
Janet Currie
Princeton Did Not Answer Bio/Vote History
Cutler
David Cutler
Harvard
Agree
4
Bio/Vote History
Deaton
Angus Deaton
Princeton
No Opinion
Bio/Vote History
Depending on the meaning, seems either trivially true, or just unclear what is being held constant.
Duffie
Darrell Duffie
Stanford
Disagree
2
Bio/Vote History
Most of the students I see seem to have new copies. Stanford may not be the norm.
Edlin
Aaron Edlin
Berkeley
Agree
6
Bio/Vote History
Eichengreen
Barry Eichengreen
Berkeley
Agree
5
Bio/Vote History
Einav
Liran Einav
Stanford
Uncertain
6
Bio/Vote History
Fair
Ray Fair
Yale
Agree
7
Bio/Vote History
Finkelstein
Amy Finkelstein
MIT
Strongly Agree
8
Bio/Vote History
Goldberg
Pinelopi Goldberg
Yale
Agree
6
Bio/Vote History
Goolsbee
Austan Goolsbee
Chicago
Agree
10
Bio/Vote History
Greenstone
Michael Greenstone
University of Chicago
Uncertain
3
Bio/Vote History
maybe. it depends on several factors, including how active these markets are and the costs of reselling/renting
Hall
Robert Hall
Stanford
Agree
8
Bio/Vote History
...to a person who was unaware of the resale market (not me!)
Hart
Oliver Hart
Harvard
Agree
8
Bio/Vote History
This seems rather self-evident, although perhaps not all students can do this. Some people no doubt also photo-copy parts of books.
Holmström
Bengt Holmström
MIT
Agree
7
Bio/Vote History
Hoxby
Caroline Hoxby
Stanford
Strongly Agree
10
Bio/Vote History
It is costly to change a textbook much with each edition so students can use much cheaper past editions with little intellectual loss.
Hoynes
Hilary Hoynes
Berkeley
Disagree
8
Bio/Vote History
The resale market helps but does not change the net burden by much,
Judd
Kenneth Judd
Stanford
Agree
7
Bio/Vote History
Kaplan
Steven Kaplan
Chicago Booth
Agree
8
Bio/Vote History
Kashyap
Anil Kashyap
Chicago Booth
Uncertain
5
Bio/Vote History
These factors help, but some students would like to be able to keep their books and that cost is much higher now
Klenow
Pete Klenow
Stanford
Agree
3
Bio/Vote History
But new editions undermine this.
-see background information here
Levin
Jonathan Levin
Stanford
Agree
6
Bio/Vote History
Maskin
Eric Maskin
Harvard
Agree
5
Bio/Vote History
Nordhaus
William Nordhaus
Yale
Strongly Agree
9
Bio/Vote History
Saez
Emmanuel Saez
Berkeley
Disagree
3
Bio/Vote History
Samuelson
Larry Samuelson
Yale
Agree
8
Bio/Vote History
The net burden is lower than the retail price, but still scandalously high.
Scheinkman
José Scheinkman
Columbia University
Agree
6
Bio/Vote History
Schmalensee
Richard Schmalensee
MIT
Uncertain
4
Bio/Vote History
"Substantially" depends on those markets having few frictions, and I have no idea if that is the case.
Shapiro
Carl Shapiro
Berkeley
Agree
8
Bio/Vote History
Shimer
Robert Shimer
University of Chicago
Agree
5
Bio/Vote History
It would be useful to know what fraction of books are rented or resold.
Thaler
Richard Thaler
Chicago Booth
Uncertain
1
Bio/Vote History
Udry
Christopher Udry
Northwestern
Strongly Agree
7
Bio/Vote History
See Chevalier, Judith, and Austan Goolsbee. "Are durable goods consumers forward-looking? Evidence from college textbooks."
-see background information here

Question C Participant Responses

Participant University Vote Confidence Bio/Vote History
Acemoglu
Daron Acemoglu
MIT
Uncertain
5
Bio/Vote History
Alesina
Alberto Alesina
Harvard Did Not Answer Bio/Vote History
Altonji
Joseph Altonji
Yale
Disagree
4
Bio/Vote History
Auerbach
Alan Auerbach
Berkeley
Uncertain
3
Bio/Vote History
Autor
David Autor
MIT
Disagree
8
Bio/Vote History
Only if you include agency problems among the "standard forces" of supply and demand.
Baicker
Katherine Baicker
University of Chicago
Disagree
2
Bio/Vote History
Banerjee
Abhijit Banerjee
MIT Did Not Answer Bio/Vote History
Bertrand
Marianne Bertrand
Chicago
Disagree
3
Bio/Vote History
Brunnermeier
Markus Brunnermeier
Princeton
Disagree
8
Bio/Vote History
Chetty
Raj Chetty
Harvard Did Not Answer Bio/Vote History
Chevalier
Judith Chevalier
Yale
Agree
8
Bio/Vote History
Professors only partially consider price when choosing textbooks. And consider test banks and other perks.BUT students are P elastic.
Currie
Janet Currie
Princeton Did Not Answer Bio/Vote History
Cutler
David Cutler
Harvard
Agree
4
Bio/Vote History
More than just classic supply and demand, though.
Deaton
Angus Deaton
Princeton
Agree
8
Bio/Vote History
In some sense, this MUST be true. What else could it be?
Duffie
Darrell Duffie
Stanford
Strongly Disagree
4
Bio/Vote History
Author-publisher search costs are high. Then, second-hand market aside, the publisher has a monopoly on the title, implying pricing power.
Edlin
Aaron Edlin
Berkeley
Disagree
8
Bio/Vote History
Eichengreen
Barry Eichengreen
Berkeley
Uncertain
5
Bio/Vote History
Einav
Liran Einav
Stanford
Agree
7
Bio/Vote History
Fair
Ray Fair
Yale
No Opinion
Bio/Vote History
Question too broad
Finkelstein
Amy Finkelstein
MIT
Agree
3
Bio/Vote History
Goldberg
Pinelopi Goldberg
Yale
Disagree
6
Bio/Vote History
Goolsbee
Austan Goolsbee
Chicago
Agree
5
Bio/Vote History
Greenstone
Michael Greenstone
University of Chicago
Agree
2
Bio/Vote History
Chevalier/Goolsbee research suggests demand is price elastic so not divorced from S & D but agency problem surely creates distortions
Hall
Robert Hall
Stanford
Agree
5
Bio/Vote History
Provided one takes a broad view of supply and demand--printed books are a sunset product, and thus pricey.
Hart
Oliver Hart
Harvard
Disagree
5
Bio/Vote History
In some fields there will be a prominent book with few competitors. The author has some monopoly power; the equilibrium price may be high.
Holmström
Bengt Holmström
MIT
Disagree
7
Bio/Vote History
Hoxby
Caroline Hoxby
Stanford
Uncertain
8
Bio/Vote History
There is an agency problem (instructors=agents, students=principals) but not severe owing to used books and student evaluations.
Hoynes
Hilary Hoynes
Berkeley
Uncertain
5
Bio/Vote History
Judd
Kenneth Judd
Stanford
Disagree
7
Bio/Vote History
Product differentiation and lack of incentives for professors to make efficient choices make this unlikely.
Kaplan
Steven Kaplan
Chicago Booth
Agree
2
Bio/Vote History
Kashyap
Anil Kashyap
Chicago Booth
No Opinion
Bio/Vote History
I don't have a good story for where the market failure or market power comes from, but the relative price has gone way up.
Klenow
Pete Klenow
Stanford
Strongly Disagree
5
Bio/Vote History
Levin
Jonathan Levin
Stanford
Agree
1
Bio/Vote History
Maskin
Eric Maskin
Harvard
No Opinion
Bio/Vote History
Nordhaus
William Nordhaus
Yale
Disagree
8
Bio/Vote History
Text prices include bundled ancillaries which students pay for but are benefits for teachers.
Saez
Emmanuel Saez
Berkeley
Strongly Disagree
6
Bio/Vote History
Samuelson
Larry Samuelson
Yale
Disagree
11
Bio/Vote History
There are too many imperfections and frictions in this market to model it simply in terms of demand and supply.
Scheinkman
José Scheinkman
Columbia University
Uncertain
4
Bio/Vote History
Schmalensee
Richard Schmalensee
MIT
Disagree
3
Bio/Vote History
Shapiro
Carl Shapiro
Berkeley
Agree
8
Bio/Vote History
Surely the prices reflect supply and demand, but not nearly so well as they would without the agency issues identified in the question.
Shimer
Robert Shimer
University of Chicago
Agree
7
Bio/Vote History
But demand may be quite inelastic, since once a book is selected for a course, there are no substitutes.
Thaler
Richard Thaler
Chicago Booth
Disagree
4
Bio/Vote History
When the chooser is not the user then bad outcomes are common. My views are captured here: http://bit.ly/1Cql4mR
Udry
Christopher Udry
Northwestern
Uncertain
1
Bio/Vote History
Difficult to interpret this question.