ANALYSIS: Why publishers have been raising book prices so much

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By Wyatt Bush

CMU senior Andrew Mixer could hardly believe it when he saw the $1,000 price tag for his textbooks this semester.

“Every year I have been here, the books have gotten more and more expensive,” the 22 year-old marketing and logistics major said. “You’ve to cut costs somewhere else, so your housing might be cheaper, or you might now not pay the $150 for a parking permit.”

Mixer, a Novi native, said he was frustrated with being forced to purchase his books, the majority of which were CMU issue only. He believed the prices he paid were not reflecting their true value.

“My professor teaches all on PowerPoints and has pulled maybe four things out of the book,” Mixer said. “That’s $300 for a book I’ll take four things out of the entire year.”

A 2011-12 study by the National Association for College Stores found full-time students spent an average of $420 on books at their local college bookstores annually, though this total does not include potential spending outside of the bookstore.

Despite pressures to decrease book prices as a result of the emergence of used, online and rental book markets nationwide, the Government Accountability Office found in a 2013 study that the price of college textbooks increased 82 percent between 2002-12, nearly triple the rate of inflation.

Escanaba senior Ashley Kennedy said she spends less money on textbooks now than in her earlier years on campus, though she credited this to her savvy in discovering methods of acquiring textbooks outside the CMU Bookstore.

Kennedy said she typically purchased hardcover books from web outlets such as Amazon but would occasionally buy eBooks or not purchase the textbook at all if she believed it would have little or no use.

“When I was a freshman, I would have to take out loans just to pay for textbooks,” Kennedy said. “I mean, I would spend $600 a semester only on textbooks.”

Central Michigan University Economics Department Chairman Paul Natke said prices have surged in recent years thanks, in large part, to the consolidation of many textbook publishers in the past twenty years.

With a fewer number of firms in the marketplace, each now has a greater ability to control the price.

“With less competition, you can expect (textbook publishers) to raise prices and reduce output to maximize their profits,” Natke said. “It’s a classic case.”

Natke said the price increase might also be a due to an increase in the price of complementary goods.

Complementary goods are goods that generally have inverse price relations with one another. For example, as the price of mustard decreases, more people are going to want to buy hot dogs – the goods are complementary.

A complementary good to college textbooks would be tuition. In theory, if the price of tuition increased, fewer people could afford to attend college and therefore the price of textbooks would decrease to reflect this change. However, if there was no decrease in the number of students attending college despite higher prices, Natke said publishers could feel that they could increase their prices, as well.

From 2002-12, the GAO found tuition prices increased by 89 percent in the United States. Despite the higher costs of attending college, the percentage of 18-24-year-olds attending an American university increased from 36.7 percent to 41 percent in the same period.

“For most college students, tuition is a bigger bill than textbooks, so they might not be very price sensitive,” Natke said.

From 2001-02 to 2012-13, CMU’s undergraduate tuition rate per credit hour more than tripled from $118.90 to $365.

In an email to CMU Insider, Barry Waters, the director of the CMU Bookstore, said he had been running college bookstores for 28 years and could remember when not a single textbook would set students back $100.

Waters said publishers are effectively pricing students and bookstores out of reach of physical textbook affordability. He said within the past six years alone, annual price increases have averaged anywhere between 14-36 percent, an aberration from the standard 2-3 percent.

Even though the CMU Bookstore provides a price aggregator that allows its customers to compare rental, hardcover and eBook prices of the store against competitors, Waters said in the ­past decade, the store has annually averaged 160,000 physical book sales and only 400 eBook sales.

Pressure to decrease prices has emerged to an extent, with more widespread use of rentals and eBooks across the country. The National Center for Education Statistics of the U.S. Department of Education found the average costs of books and supplies for students attending a four-year institution decreased 1.7 percent from $1,277 to $1,255.

However, there are concerns about the actual cause of this decrease: Namely, that students are choosing to not buy textbooks.

January PIRG study found 65 percent of students decided against buying textbooks because prices were too expensive. Of those who had foregone purchasing a textbook, 94 percent believed the decision had adversely impacted their grade.


One thought on “ANALYSIS: Why publishers have been raising book prices so much

  1. Really interesting that you say 65% of students chose not to buy textbooks because of cost! A study by Universities Australia found that 17% of Aussie students regularly skip meals to be able to afford textbooks! This is clearly a problem that students across the world face – trying to get an education to improve their futures, but struggling to make it through years of study on little to no income.

    Like

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