Wednesday, October 3, 2007

UC, College Textbook Prices, and the legislature

Students graduate and become professors and legislators. They remember the wrongs of their youth, especially the non-classroom annoyances. College bookstores are often the prime source of discontent. “Sell high, and buy back low” does not engender goodwill with students. Neither does under-ordering books to save money.

Bookstores, in turn, blame their high prices on the publishers. Students are outraged by the prices charged. Books for four or five courses can often add up to $500 per semester or quarter.

The California Legislature has sent two bills to Governor Schwarzenegger for his signature. The first would require publishers to provide faculty members a list of all books published in their subject area, an estimate of how long the publisher intends to keep the edition in print, and a list of the changes in new editions. This information would also be available online.

The second bill requires publishers to provide a summary of differences between the current and previous editions. Faculty could also request a printed or online list of wholesale prices and edition changes. College bookstores at public institutions would have to disclose their retail pricing policies. Similar to the federal laws against payola in the music industry, it will become illegal for anyone to order books in exchange for anything of value.

The goals of these two bills are to provide transparency in the textbook market, and hopefully restrain the high prices for college books.

No question that the publishers are charging exorbitant prices, and steadily increasing prices at a rate that exceeds inflation. A federal study two years ago showed that textbook prices over two decades climbed at twice the rate of inflation. The current editions of books, that I paid $14 four decades ago in law school, are now $100, roughly a 7% annual increase.

No question also that the publishers inhibit a market in used books by regularly issuing new editions, usually on a three year cycle, even if the revisions are de minimis and could easily be accommodated with a small supplement. No question too that law publishers boost their revenue by separating statutory (non-copyright protected) materials out of the text, and publishing them in a separate supplement essential to the student’s understanding of the materials.

Publishers can claim that specialized courses with small print runs justify a high price, and that many print runs are unprofitable.

The reality is that the prices are high because the publishers have the market power to do so. The number of publishers has shrunk through mergers, resulting in a substantial drop in competition. That is the essence of capitalism. The problem for students is that they can’t shop around, except for a few scattered used books. They do not necessarily choose the course or the section, but they must use the assigned book, which at many universities may have been written by the professor. Publishers also prefer many co-authors to boost the base market for a book.

Professors who care about the price of books have alternatives. For example, they can teach a course with duplicated materials, or through on-line postings, which necessitates students printing out the materials themselves. They may also provide a brief supplement of the essential materials not in the course book. These alternatives result in a substantial savings over published prices.

The preparation of duplicated materials may be very time consuming or unfeasible in many courses, especially for young professors at the start of their careers. The preparation of duplicated materials will often detract from the pursuit of scholarly and creative activities essential for promotion and tenure. The first sets will also probably be “primitive.” I use duplicated materials in my courses, but the students complain, often justifiably, of the inconsistent quality of the reproductions, over which I lack control.

However, the Legislature is off base. Books are but a small percent today of the costs of higher education. If the concerns are the rising costs of college, then the Legislature should be investigating itself and the Regents of the University of California for driving up the cost of tuition and fees.

By substantially cutting their support for higher education for decades the Legislature has forced the Regents of UC, the Trustees of the Cal State System, and the community colleges to raise tuition.

By way of comparison, the University of California did not even impose tuition until the end of 1967. Tuition and fees at Berkeley totaled $4,354 a decade ago and almost doubled to $8,384 this year. In 1991 tuition and fees at Berkeley amounted to only $1,920. In other words, tuition and fees at Berkeley rose 337% in 16 years. The figures for the other UC campuses are comparable.

The tuition increases for the professional schools are even more horrific. The tuition for Boalt Hall is now scheduled to increase 52% over the next three years to almost $41,000 – for California residents.

Textbook prices are high, but nothing compared to tuition.

The state budget for higher education is the easiest for the Legislature to cut, because unlike many beneficiaries of public support, the colleges can impose user fees (tuition and fees) that are in essence taxes on the students. Because these are not broad-based taxes, the public does not object. The poor and middle classes pay, often by sending their children to less prestigious institutions, going deeply into debt, or not completing college.

One proposal by California’s Treasurer is that the state should phase out its appropriations over 20 years for the University of California. Watch what happens to tuition and fees then.

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