Economics lecturer discusses textbook market

With the fall semester about to start, students fill stores, shopping for all their back-to-school essentials. For some, the most costly trip is the one to the bookstore, where they might spend hundreds of dollars on course-required materials.

“The book industry is essentially an oligopoly,” IU Economics Senior Lecturer Paul Graf said. “It is dominated by a few large firms.”

Graf said the textbook industry doesn’t have the consumers — the students — choosing the product. This gives the book publishers more power to set prices high.

“In the classroom, instructors select the books,” Graf said. “Publishers know this, and they can charge higher prices. The goal for the consumers is how to find a substitute.”
T.I.S. College Bookstore is one of the bookstores where IU students can pick up textbooks.

“Often, students can spend $300 for a semester,” T.I.S. Textbook Manager Tim Lloyd said. “For science-heavy courses, it can run $600 to $700, pre-med students can spend up to $1,000.”

Lloyd said T.I.S. does as much as it can to reduce costs for students. From offering textbook rentals to buying back old editions and selling them at reduced prices, there are many options.

“Our favorite source for books is students,” Lloyd said. “We hate having to push a book back across the counter and not buy it.”

However, some think book prices still remain high at bookstores. Jay Kincaid bought books at T.I.S. for his high school daughter who is taking a class at IU. After purchasing two small paperback books, he walked out of the store, while talking to other patrons.

“Look at this. How much do you think this costs?” he said. “Seventy dollars for this used book, another $70 for this new one.”

“It’s just ridiculous that I spent $140 for two paperback English composition books,” Kincaid said.

Graf said publishers go to great lengths to make sure even purchasing used books is a challenge.

“Publishers want to minimize the used book market,” Graf said.

“They provide insulary material to maintain their pricing power through more than the book,” he said.

Graf said textbooks will update problem sets, therefore new editions should be bought. Some books also require electronic materials, which can only be used once. As a result, old textbooks lose value.

However, Graf said there are ways to take the power back from the publishers.

“Over time, instructors have become more sensitive to book prices,” he said. “Many try to find alternatives to textbooks, or choose cheaper ones if they teach similar overall content.”

However, Graf said others might be reluctant to change.

“If teachers teach a certain way, switching books can be additional work on their part,” he said.

Students also have options to lower costs, especially with the advent of greater technology.

“Before, students just went to the bookstore,” Graf said. “Now the internet has lowered the cost of finding substitute goods.”

Students can purchase books online for reduced prices, try and obtain international copies or even sell books to each other directly.

Graf said the game has always been a “cat and mouse” competition between publishers and students.

For now, prices at stores remain high, and students must find alternatives if they want
to save on textbooks.

“I think it’s heading toward long run equilibrium,” Graf said. “Content standardization, lowering prices and customization of materials raising it.”

— Stephen Kroll