Textbooks

A textbook is a manual of instruction or a standard book in any branch of study. They are produced according to the demand of educational institutions. Although most textbooks are only published in printed format, many are now available as online electronic –books, e-books and increasingly in scanned format in p2p networks.

History
Texts specifically designated for educational purposes were written in ancient Greece. The modern textbook has its roots in the standardization made possible by the printing press. Johann Gutenberg himself may have printed editions of Ars Minor, a schoolbook on Latin grammar by Aelius Donatus. Early textbooks were used by tutors, teachers, who used the books as instructional aids (e.g. alphabet books) and individuals involved in autodidacticism..

Compulsory education and the subsequent growth of schooling in Europe led to the printing of many standardized texts for children. Textbooks have become the primary teaching instrument for most children since the 19th century. Two textbooks of historical significance in United States schooling were the 18th century New England Primer and the 19th century McGuffey Readers.

Technological advances are constantly changing higher education landscape, including textbooks. Online and digital materials are making it increasingly easy for students to access materials other than the traditional print textbook. Students now have access to electronic and PDF books, online tutoring systems and video lectures.

Most notably, an increasing number of authors are foregoing commercial publishers and offering their textbooks under a creative commons or other open license.

The "Broken Market"
The textbooks market does not operate according to the same economic principles as a normal consumer market. First, the end consumers (students) do not select the product, and the people choosing the product (faculty) do not purchase the product. Therefore, price is removed from the purchasing decision, giving the producer (publishers) disproportionate market power to set prices high.

This fundamental flaw in the market is blamed as the primary reason that prices are out of control. The term "Broken Market" first appeared in Economist James Koch's analysis of the market commissioned by the Advisory Committee on Student Financial Assistance.

This situation is exacerbated by the lack of competition in the textbook market. A recent wave of consolidation reduced the number of major textbook companies to just three: Pearson, Cengage Learning and McGraw-Hill. Consequently, there is less competition than there used to be, and the high cost of startup keeps new companies from entering.

New editions & the used book market
Students seek relief from rising prices through the purchase of used copies of textbooks, which tend to be less expensive. Most college bookstores offer used copies of textbooks at lower prices. Most bookstores will also buy used copies back from students at the end of a term if the book is going to be re-used at the school. Books that are not being re-used at the school are often purchased by an off-campus wholesaler for 0-30% of the new cost, for distribution to other bookstores where the books will be sold.

Students who look beyond the campus bookstore can typically find lower prices. With the ISBN or title, author and edition, most textbooks can be located through online used book sellers or retailers.

Most leading textbook companies publish a new edition every 3 or 4 years, more frequently in math & science. All the homework problems in the books are rewritten, to force the students to buy the latest version. A study conducted by The Student PIRGs found that a new edition costs 12% more than a new copy of previous edition, and 58% more than a used copy of the previous edition. Textbook publishers maintain these new editions are driven by faculty demand. The Student PIRGs' study found that 76% of faculty said new editions were justified “half of the time or less” and 40% said they were justified “rarely” or “never.”

The Student PIRGs also point out that recent emphasis on electronic textbooks, or "eTextbooks," does not always save students money. Even though the book costs less up-front, the student will not recover any of the cost through resale.

Bundling
Another publishing industry practice that has been highly criticized is "bundling," or shrink-wrapping supplemental items into a textbook. Supplemental items range from CD-ROMs and workbooks to online passcodes and bonus material. Students do not always have the option to purchase these items separately, and often the one-time-use supplements destroy the resale value of the textbook.

According to The Student PIRGs, the typical bundled textbook is 10%-50% more than an unbundled textbook, and 65% of professors said they “rarely” or “never” use the bundled items in their courses.

The 2005 GAO Report found that the production of these supplemental items was the primary cause of rapidly increasing prices: While publishers, retailers, and wholesalers all play a role in textbook pricing, the primary factor contributing to increases in the price of textbooks has been the increased investment publishers have made in new products to enhance instruction and learning...While wholesalers, retailers, and others do not question the quality of these materials, they have expressed concern that the publishers’ practice of packaging supplements with a textbook to sell as one unit limits the opportunity students have to purchase less expensive used books....If publishers continue to increase these investments, particularly in technology, the cost to produce a textbook is likely to continue to increase in the future.

Bundling has also been used as a means of segmenting the used book market. Each combination of a textbook and supplemental items receives a separate ISBN. A single textbook could therefore have dozens of ISBNs that denote different combinations of supplements packaged with that particular book. When a bookstore attempts to track down used copies of textbooks, they will search for the ISBN the course instructor orders, which will locate only a subset of the copies of the textbook.

Pending legislation on the state and federal level that seeks to limit the practice of bundling, by requiring publishers to offer all components separately. Publishers have testified in favor of bills including this provision, but only in the case that the provision exempts the loosely defined category of "integrated textbooks." The Federal bill only exempts 3rd party materials in integrated textbooks, however publisher lobbyists have attempted to create a loophole through this definition in state bills.

Price Disclosure
Given that problem of high textbook prices is linked to the "broken" economics of the market, requiring publishers to disclose textbook prices to faculty is a solution pursued by a number of legislatures. By inserting price into sales interactions, this regulation will supposedly make the economic forces operate more normally.

No data suggests that this is in fact true. However, The Student PIRGs have found that publishers actively withhold pricing information from faculty, making it difficult to obtain. Their most recent study found that 77% of faculty say publisher sales representatives do not volunteer prices, and only 40% got an answer when they directly asked. Furthermore, the study found that 23% of faculty rated publisher websites as “informative and easy to use” and less than half said they typically listed the price.

The US House passed language in the 2008 Higher Education Act reauthorization bill that would require price disclosure. Legislation requiring price disclosure has passed in Connecticut, Washington, Minnesota, Oregon, Arizona, Oklahoma, and Colorado. Publishers are currently supporting price disclosure mandates, though they insist that the "suggested retail price" should be disclosed, rather than the actual price the publisher would get for the book.

Used textbook market
Once a textbook is purchased from a retailer for the first time, there are several ways a student can sell his/her textbooks back at the end of the semester. Students can sell to 1) the college/university bookstore; 2) fellow students; or 3) a number of online Web sites or student swap service.

Campus buyback
As for buyback on a specific campus, faculty decisions largely determine how much a student receives. If a professor chooses to use the same book the following semester, even if it is a custom text, designed specifically for an individual instructor, bookstores often buy the book back. A Government Accountability Office (GAO) report found that, generally, if a book is in good condition and will be used on the campus again the next term, bookstores will pay students 50 percent of the original price paid. If the bookstore has not received a faculty order for the book at the end of the term and the edition is still current, they may offer students the wholesale price of the book, which could range from 5 to 35 percent of the new retail price, according to the GAO report.

When students resell their textbooks during campus “buyback” periods, these textbooks are often sold into the national used textbook distribution chain. If a textbook is not going to be used on campus for the next semester of courses then many times the college bookstore will sell that book to a national used book company. The used book company then resells the book to another college bookstore. Finally, that book is sold as used to a student at another college at a price that is typically 75% of the new book price. At each step, a markup is applied to the book to enable the respective companies to continue to operate.

Student to student sales
Students can also sell or trade textbooks among themselves. After completing a course, sellers will often seek out members of the next enrolling class, people who are likely to be interested in purchasing the required books. This may be done by posting flyers to advertise the sale of the books or simply soliciting individuals who are shopping in the college bookstore for the same titles. Many larger schools have independent websites set up for the purpose of facilitating such trade. These often operate much like digital classified ads, enabling students to list their items for sale and browse for those they wish to acquire.

Textbook exchanges
In response to escalating textbook prices, limited competition, and to provide a more efficient system to connect buyers and sellers together, online textbook exchanges were developed. Most of today's sites handle buyer and seller payments, and usually deduct a small commission only after the sale is completed.

According to textbook author Henry L. Roediger (and Wadsworth Publishing Company senior editor Vicki Knight), the used textbook market is illegitimate, and entirely to blame for the rising costs of textbooks. As methods of "dealing with this problem", he recommends making previous editions of textbooks obsolete, binding the textbook with other materials, and passing laws to prevent the sale of used books.

Rental Programs
According to Nicole Allen of The Student PIRGs, renting is “the best short-term” way to lower textbook costs. PIRG data found that students using existing textbook rental services pay $130 to $240 per year plus some course materials, while students attending public four-year colleges currently pay an average of $800 to $900 to purchase their textbooks each year.

More than 20 schools offer textbook rental programs, including The University of Wisconsin-Whitewater and Southern Illinois University.

Open Textbooks
The latest trend in textbooks is "open textbooks." An open textbook is a free, openly-licensed textbook offered online by its author(s). A number of these textbooks already exist, according to PIRG, and are being used at schools ranging from Caltech to Harvard.

Although the largest question seems to be who is going to pay to write them, several state policies suggest that public investment in open textbooks might make sense.

International Market Pricing
Similar to the issue of re-importation of pharmaceuticals into the US market, the GAO report[4] also highlights a similar phenomenon in textbook distribution:

Retailers and publishers have expressed concern about the reimportation of lower-priced textbooks from international locations.

Specifically, they cited the ability students have to purchase books from online distribution channels outside the United States at lower prices, which may result in a loss of sales for U.S. retailers. Additionally, the availability of lower-priced textbooks through these channels has heightened distrust and frustration among students regarding textbook prices, and college stores find it difficult to explain why their textbook prices are higher, according to the National Association of College Stores. Retailers and publishers have also been concerned that some U.S. retailers may have engaged in reimportation on a large scale by ordering textbooks for entire courses at lower prices from international distribution channels. Concerned about the effects of differential pricing on college stores, the National Association of College Stores has called on publishers to stop the practice of selling textbooks at lower prices outside the United States.

Publishers told us that they intend for the textbooks they distribute in other countries to be sold for use in those countries, not for resale to the United States, and so have taken recent actions to limit large-scale reimportation. Most of the publishers with whom we spoke say they are particularly concerned about the actions of foreign distributors and U.S. retailers that may result in large-scale reimportation of textbooks. As a result, publishers told us they have taken recent steps to limit the reimportation of textbooks in large quantities. Specifically, publishers told us that they have strengthened their agreements with foreign wholesalers to prevent the large-scale sale of U.S. textbooks back to the United States. Some publishers also said they have made an agreement with an online retailer outside the United States to limit the number of copies of a given textbook that can be delivered to a single U.S. address in one order. Because these measures target large-scale reimportation of U.S. textbooks Publishers Have Taken Recent Steps to Limit the Reentry of Their Textbooks into the U.S. from international sources at lower prices, they will not prevent U.S. students from purchasing single copies of textbooks from international sources.

Cost distribution
According to the National Association of College Stores, the entire cost of the book is justified by expenses, with typically 11.7% of the price of a new book going to the author's royalties (or a committee of editors at the publishing house), 22.7% going to the store, and 64.6% going to the publisher. The store and publisher amounts are slightly higher for Canada.

Bookstores and used-book vendors profit from the resale of textbooks on the used market, with publishers only earning profits on sales of new textbooks.

Research
According to a U.S. General Accounting Office (GAO) study[2] published July 2005:

Following closely behind annual increases in tuition and fees at postsecondary institutions, college textbook and supply prices have risen at twice the rate of annual inflation over the last two decades.

Rising at an average of 6 percent each year since academic year 1987-1988, compared with overall average price increases of 3 percent per year, college textbook and supply prices trailed tuition and fee increases, which averaged 7 percent per year. Since December 1986, textbook and supply prices have nearly tripled, increasing by 186 percent, while tuition and fees increased by 240 percent and overall prices grew by 72 percent. While increases in textbook and supply prices have followed increases in tuition and fees, the cost of textbooks and supplies for degree-seeking students as a percentage of tuition and fees varies by the type of institution attended. For example, the average estimated cost of books and supplies per first-time, full-time student for academic year 2003-2004 was $898 at 4-year public institutions, or about 26 percent of the cost of tuition and fees. At 2-year public institutions, where low-income students are more likely to pursue a degree program and tuition and fees are lower, the average estimated cost of books and supplies per first-time, full-time student was $886 in academic year 2003-2004, representing almost three-quarters of the cost of tuition and fees.

According to the 2nd edition of a study[3] by the United States Public Interest Research Group (US PIRG) published in February 2005:

Textbook prices are increasing at more than four times the inflation rate for all finished goods, according to the Bureau of Labor Statistics Producer Price Index. The wholesale prices charged by textbook publishers have jumped 62 percent since 1994, while prices charged for all finished goods increased only 14 percent. Similarly, the prices charged by publishers for general books increased just 19 percent during the same time period.

According to the 2007 edition of the College Board’s Trend in College Pricing Report published October 2007:

College costs continue to rise and federal student aid has shown slower growth when adjusted for inflation, while textbooks, as a percentage of total college costs, have remained steady at about 5 percent.

K-12 textbooks
In most K-12 public schools, a local school board votes on which textbooks to purchase from a selection of books that have been approved by the state Department of Education. Teachers receive the books to give to the students for each subject. Teachers are usually not required to use textbooks, however, and many prefer to use other materials instead. Textbook publishing in the U.S. is a business primarily aimed at large states, especially California and Texas. This is due to state purchasing controls over the books. The Texas State Board of Education spends in excess of $600 million annually on its central purchasing of textbooks.

High school
In recent years, high school textbooks of United States history have come under increasing criticism. Authors such as Howard Zinn (A People's History of the United States), Gilbert T. Sewall (Textbooks: Where the Curriculum Meets the Child) and James W. Loewen (Lies My Teacher Told Me: Everything Your American History Textbook Got Wrong), make the claim that U.S. History textbooks contain mythical untruths and omissions, which paint a whitewashed picture that bears little resemblance to what most students learn in universities. Inaccurately retelling history, through textbooks or other literature, has been practiced in many societies, from ancient Rome to the Soviet Union (USSR) and the People's Republic of China. History textbooks are not subjected to review by professional academics, nor can authorship of a high school textbook be used to advance an academic toward tenure at a university. The content of history textbooks thus lies entirely outside the academic forum of fact and social science and is instead determined by the political forces of state adoption boards and ideological pressure groups.

Science textbooks have been the source of ongoing debates and have come under scrutiny from several organizations. The presentation or inclusion of controversial scientific material has been debated in several court cases. Poorly designed textbooks have been cited as contributing to declining grades in mathematics and science in the United States and organizations such as the American Academy of Arts and Sciences (AAAS) have criticized the layout, presentation, and amount of material given in textbooks.

Discussions of textbooks have been included on creation and evolution in the public education debate. The Smith v. Board of School Commissioners of Mobile County brought forward a debate about secular humanist values being presented in textbooks.

In his popular book, Surely You're Joking, Mr. Feynman!, the late physics Nobel Prize laureate Richard P. Feynman described his devastating experiences as he once sat in a commission that evaluated science textbooks. At some instances, there were nonsensical examples to illustrate physical phenomena; then a company sent — for reasons of timing — a textbook that contained blank pages, which even got good critiques. Feynman himself experienced veritable attempts of bribery.

Higher education
In the U.S., college and university textbooks are chosen by the professor teaching the course, or by the department as a whole. Students are typically responsible for obtaining their own copies of the books used in their courses, although alternatives to owning textbooks, such as textbook rental services and library reserve copies of texts, are available in some instances.

In Sweden, students attending institutions of higher education pay for textbooks themselves, although higher education is free of charge otherwise.

With higher education costs on the rise, many students are becoming sensitive to every aspect of college pricing, including textbooks. The 2005 Government Accountability Office report on college textbooks said that since the 1980s, textbook and supply prices have risen twice the rate of inflation in the past two decades [1]. A 2005 PIRG study found that textbooks cost students $900 per year, and that prices increased four times the rate of inflation over the past decade. A June 2007 Advisory Committee on Student Financial Assistance (ACSFA) report, “Turn the Page,” reported that the average U.S. student spends $700-$1000 per year on textbooks.

While many groups have assigned blame to publishers, bookstores or faculty, the ACSFA also found that assigning blame to any one party—faculty, colleges, bookstores or publishers—for current textbook costs is unproductive and without merit. The report called on all parties within the industry to work together to find productive solutions, which included a movement toward open textbooks and other lower-cost digital solutions.