Textbook prices
College students across the US have just been hit with sticker shock. No, not from rises in tuition at private and public universities alike, though that is bad enough. The shock comes at the bookstore, where textbooks in most subjects now cost hundreds of dollars, ratcheted up year after year.
We don't often talk about naked price manipulation by oligopolies on this site, but this is a clear case of a captive audience and a few publishers that have "agreed" silently to raise prices. That's the opinion of Yale law professor Ian Ayres, writing in the New York Times ("Just What the Professor Ordered," 9/16/2005. He quotes a government report that states that "textbook prices have risen at double the rate of inflation." This the report attributes to the high cost of adding supportive CD and online materials to college texts.
But that same government report, according to Ayres. "The real problem is the lack of price competition. A series of mergers has ensured that although there are hundreds of textbooks to choose from, the five largest publishers control 80 percent of the market/" The competitors don't need a secret meeting; they just look at others' rising prices and adjust them upward in return.
The companies try to justify higher prices, as reported in a Washington Post article (Textbook Prices on the Rise", 9/18/2004):
The $3.4 billion-a-year higher-education publishing industry says that it must keep its material current to win schools' support and that prices are competitive in each market. Industry officials defend new editions churned out by major higher-education publishers Thomson Learning, Pearson Education and McGraw-Hill. They argue that texts must be continually modernized if publishers want to keep the attention of today's college students, who are used to the graphics and interactivity of the Internet.
Though that does not explain why the same companies sell textbooks at lower prices in other countries.
Ayres points out the parallels between the cost of textbooks and those of prescription drugs, where the person "prescribing" has no need to pay for the texts/drugs and may not even be aware of their costs. The consumer, who does pay, is given no choice.
