The era of the textbook cartel and $300 textbooks is ending

November 15, 2013 Leave a comment

Friday, November 15, 2013

The era of the textbook cartel and $300 textbooks is ending

Mark J. Perry | November 12, 2013, 4:26 pm

I’ve written before about the unsustainable college textbook bubble, which is illustrated in the chart above. Between January 1998 and September 2013, the CPI for college textbooks has increased by more than 144%, compared to an increase of only 44.4% for the CPI for all items, and an increase of only 0.6% for the CPI for recreational books. In real terms, the cost of college textbooks has increased by more than 69% over the last 15 years, while at the same time the real cost of recreational books has fallen by more than 30%. The reason that the college textbook bubble is on an unsustainable price trajectory and is already starting to show some initial signs of deflating is because of the increasing amount of competition for the college textbook market. For example, here are some alternatives to the best-selling Principles of Microeconomics by Greg Mankiw, which has a list price of $306.a) For only $19.99, students can purchase a “Full online text alternative with SmartNotes (that summarize long text into the key points and the terms students need to study effectively), quizzes and flashcards” from Boundless that exactly matches the material in the Mankiw textbook.

b) Textbook Media Press offers the textbook “Principles of Microeconomics” by Timothy Taylor starting at only $19.95 for an online version of the book. Alternatively, students can buy the “digital bundle” version of the book for $27.95, which adds downloadable PDF chapters for self-printing and off-line studying to the online version, or a black-and-white paperback print version for $38.

c) For $35, students can get online access to the book “Principles of Microeconomics” (by Libby Rittenberg and Timothy Tregarthen) from Flat World Knowledge. A black-and-white hard copy text costs only $50.

OpenStax College is another new challenger to the textbook cartel. They just started last year, so the selection of textbooks is currently limited to about five titles (Statistics, Anatomy, Physics, Sociology and Biology), but they’ve got lots of new titles scheduled for release in Winter 2014 including Principles of Macroeconomics, Principles of Microeconomics, Chemistry and US History. According to a Chronicle of Higher Education article, “OpenStax is working to build a catalog of 25 textbooks that will pack the biggest possible punch for students. Its offerings are being developed based on college courses with the most students in the United States—and those with the most expensive textbooks.”

And what sets OpenStax apart from the other competitors is that they are offering free, open source textbooks, here’s more information from its website:

OpenStax College is a nonprofit organization committed to improving student access to quality learning materials. Our free textbooks are developed and peer-reviewed by educators to ensure they are readable, accurate, and meet the scope and sequence requirements of your course. Through our partnerships with companies and foundations committed to reducing costs for students, OpenStax College is working to improve access to higher education for all. OpenStax College is an initiative of Rice University and is made possible through the generous support of several philanthropic foundations.

Here’s a video about OpenStax:

http://www.youtube.com/watch?feature=player_embedded&v=XgeA9h2c7ag

Filed under Macro Trends

Unknown's avatarAbout bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a comment