A week or so ago, E.Volokh discussed the problem of self-dealing in assigning casebooks. He defended the practice of assigning one’s own works against criticism by Ian Ayres. At the time, I found Volokh’s rebuttal persuasive enough not to read Ayres’ essay. I’ve now done so, and found to my surprise that Ayres raises a second, wholly distinct issue: casebooks are too expensive, and there is an easy way to bring prices down.
[T]he pricing problems with textbooks are eerily analogous to those affecting prescription drugs. In both cases you have doctors (Ph.D.’s or M.D.’s) prescribing products. In neither case does the doctor pay for the product prescribed — in many cases, he or she doesn’t even know what it costs. And the clincher is that in both cases, the manufacturers sell the same product at substantially reduced prices abroad.
The analogy to prescription drugs suggests a possible solution. Perhaps universities can take a lesson from managed health care. Health maintenance organizations are often criticized for being too stingy, but let’s not forget that they’ve played an important role in containing health care costs.
So just imagine what would happen if universities started to provide textbooks to their students as part of the tuition package. Of course tuition would have to rise, but for the first time universities would start caring about whether their professors were too extravagant in the selection of class materials.
This is a pretty radical solution. The immediate problem that comes to mind is academic freedom. When universities “start caring” that professors are “too extravagant” in course materials, what will they do? Presumably, they will establish caps on the price of materials to be assigned (at best) or mandating materials (at worse). Either solution would seem require professors to shift the emphasis of their teaching, over the long run, to lectures/discussion supported by cheaply distributed information. Careful, thoughtful, in-depth treatments (i.e., big books) will become less useful, while short, cheap sources (i.e., this blog!) will be advantaged.
Do we need the managed care solution? Maybe not.
It seems to me that part of the reason that prices are continuing to rise in the pharmaceutical industry is the social choice to encourage monopoly profit-taking through the patent laws. Importantly, customers are prevented from choosing low cost generic alternatives to the brand names.
By contrast, the analogue to generic drugs – used textbooks – appears to be a thriving market. Many of the students in my contracts class are not paying list price, but are instead using copies from last year’s class. Publishers (for many reasons) do not control the secondary market in books. If it is true that “first edition” prices are on the rise, schools could do their students a good service by encouraging used-book markets (as Temple does) instead of engaging in a top-down price control system.
(Hat tip: ContractsProf Blog.)
Posted by Dave Hoffman on September 28, 2005 at 01:35 PM
» Isn’t there more to it than that? from Letters of Marque Via Prawfsblawg, I finally read Ayres’ essay on textbook prices. Ayres notes: Indeed, the pricing problems with textbooks are eerily analogous to those affecting prescription drugs. In both cases you have doctors (Ph.D.’s or M.D.’s) prescribing product… [Read More]
Tracked on Sep 28, 2005 10:31:11 PM
Comments
Why not try a different top-down approach? What if, in the interests of open access to education, materials designated for educational purposes were required to be sold at cost, instead of for profit?
Right now, educational publishers basically have a cornered market. The consumer, in many cases, HAS to buy — the used book market is the only competitor, and as mentioned, this competitor can often be eliminated through marketing strategy. I think many students would agree that there is a kind of price gouging that goes on in the textbook industry.
So why not, in the interests of education — and perhaps even in the interests of antitrust law?? — eliminate the for-profit element?
(And author royalties could be considered part of cost, so they would be covered, rather than eliminated.)
Posted by: Doc | Sep 29, 2005 9:57:41 AM
What Matt said.
The used-book market is a partial solution that is only effective so long as clever authors and publishers do not find a way to limit the power of the first-sale rule.
A better, but still imperfect analogue to the used-book market is probably the existing, but not recommended, practice among senior citizens of selling lawfully-acquired prescription medicine to each other that they have too much of (particularly as the expiration date nears).
Posted by: Salil Mehra | Sep 29, 2005 12:21:07 AM
In philosophy there is a joke, found in the wonderful “Philosophical Lexicon” about coming out with new editions so as to kill the used book market, based on the name of logician Irvin Copi, author of one of the most widely used logic text books, one that happend to go through at least 12 editions:
copiwrite, v. To come out with a revised edition for some purpose (e.g. to remove inconsistency or cut off the used book market).
Copi was, I’m told, one of the few philosophers who owned his own yacht.
Posted by: Matt | Sep 28, 2005 11:41:38 PM
Dave: I thought, since you introduced the (flawed) analogy, you understood why it could be useful. Never mind.
Posted by: Kate Litvak | Sep 28, 2005 10:30:53 PM
Ayres perhaps gives too much credit to HMOs. Increases in health care spending were slower than historically through the 1990s (the intro. of HMOs). But since it has regained its momentum.
Posted by: Isaac | Sep 28, 2005 10:26:39 PM
Kate: No. Because I am not writing about the “generic-drugs conundrum” (I’m not sure I know what that means) but rather about whether it would be a good idea for universities to include book fees in tuition.
“Bench”: I guess that we have to balance the cost consideration against the value to be found in new editions of casebooks, which (in my limited experience) often substantially improve the pedagogical value of existing books, include new theoretical perspectives or historical background, and (not incidentally) force us to re-engage with the material with a fresh eye.
Posted by: Dave Hoffman | Sep 28, 2005 9:58:17 PM
Used textbooks are not an analogue to generic drugs. They are an analogue to used medical equipment, for which there is a thriving market.
The real analogue to generic drugs is for you and me to get together, copy a major casebook verbatim, and publish it for profit without paying anything to the original authors. With a huge sign across the cover “Compare to Gunther and Sullivan and save!”
Make it a casebook that has “problem-solving” pages, so once a student uses it and completes the assignments, a book cannot be re-sold.
Did the correct analogy make you think twice about the generic-drugs conundrum?
Posted by: Kate Litvak | Sep 28, 2005 9:20:27 PM
Every book I’ve bought for the last 3 semesters of law school was used, and much cheaper. Obviously, I had some cooperation from professors who didn’t assign brand new books, but it’s saved me hundreds of dollars. Could professors further help this secondary market by sticking with the same edition longer? How changing, for example, is Contracts, that a new book is needed every 2 years?
Posted by: Bench | Sep 28, 2005 4:29:56 PM
Every book I’ve bought for the last 3 semesters of law school was used, and much cheaper. Obviously, I had some cooperation from professors who didn’t assign brand new books, but it’s saved me hundreds of dollars. Could professors further help this secondary market by sticking with the same edition longer? How changing, for example, is Contracts, that a new book is needed every 2 years?
Posted by: Bench | Sep 28, 2005 4:24:26 PM