Archive for the 'Money' Category

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Too Heavy and Too Expensive

No, Dog, I ain’t talking about your girlfriend, car or chain necklace. I’m talking about my pet peeve, the outrageous cost of college textbooks. I’ve elucidated on the topic before; things haven’t changed much in the last few months, but now I’ve stumbled upon a solution that might set all of us college students free. It’s the textbook reader. Who knew?

Here’s an excerpt:

DRM and electronic books could help lower college educational expenses while at the same time improving the health of students.

Here’s why: the economics of textbook publishing are broken. There’s a reason that an introductory biology textbook costs $125 new, and it’s not because it’s printed on high-quality paper using a special 12-color press. It’s because when the student is done with the book, he or she sells it back to the campus bookstore, or to another student. The publisher is thus deprived of recurring revenue on the title. So it raises book prices, heaping the revenue it would get from multiple students over multiple years onto one unlucky soul. But the more expensive books get, the more likely students are to recycle them. It’s a death spiral of cost. (Emphasis mine)


And, as a “more mature” student, I particularly appreciate this point:

And the health benefits? It’s a lot better for your back if you’re just carrying one 3-pound e-book instead of a half-dozen 8-pound printed texts.

I don’t even want to start on some other issues related to textbooks, like the idea that books are lumped into the final number of your student loan, so their cost is simply not important to the end-user. I’ll just note that if text-books were NOT covered by loans we would most likely hear a lot more squalling. Put another way, I think the text-book crisis is akin to the health insurance problem: until consumers start realizing the true cost (and bearing more of it) there won’t be any pressure on providers to control pricing.

Hidden Costs III

A while back, when I was new and fresh in the academic adventure, I expressed my dismay about the cost of textbooks. As professors are wont to kindly say, they are helping us “save” money by continuing to use older editions of texts. Such beneficence!

My calculus text is out of print. The beloved 4th edition of Calculus, Early Transcendentals 4th Edition (1999), has been replaced by the 5th Edition (2002). The 4th edition is required, at my school, for three sequences of calculus. Most science majors are required to take the first two sequences, and a small subset must take all three (and then some!).

Think about it. The school requires its students to use a finite resource, i.e., the textbook. There is a limited supply that, by definition, decreases each year. Some books wear out after too much abuse, some books are kept by students for future reference, and some are held by other students for at least 3 semesters. The number of students enrolling in calculus classes is a constant. It make sense to assume that a constant demand for a shrinking resource induces a stress on the supply, and price, of the product. In the college textbook world, I think that means that the price the market will bear for used textbooks is higher than if the supply was infinite. Our professors are saving us money by forcing us to buy used textbooks, but demand and pricing are driving prices higher. I think we are trapped in a paradox.

There are several students in my calculus class that still, after 2 weeks, cannot buy a textbook. I would have gone insane by now.

I do want to buy my favorite accessory, the student solutions manual, which I have used with great effect in earlier math classes. Guess what? The publisher no longer supports the 4th edition student solutions manual. Why should they?

Today, I found, after a long search, a student solutions manual. If you followed the link, you know that some enterprising person has managed to put the solutions manual (at least the questions and solutions) on the web. You will also see that the basic service is free (good enough for me), but the premium features require a subscription. Looks like the marketplace has provided yet another source of profit for someone other than the publisher and the school.

Maybe, when I take an economics course, I can study this market in more detail. Maybe our economics department should, too, and forward the results to our school officials. Or maybe the textbook market is like the health insurance market, just too complex for simple students to understand and too unwieldy for bureaucrats to manage.

Hidden Costs II

The second surprise of the return to college occurred when I bought my textbooks for the coming semester. As a side note, my very first semester in college, lo those many years ago, got off on the wrong foot when my parents and I arrived on campus at the last minute. By the time I was moved in and ready for the start of class, most of my textbooks were sold out. This was so disturbing that I was too embarrassed to go to some of my classes. I did not understand that I had other options. Thus were set the conditions for my early departure from that lovely bastion of Southern education. If I did not gain much from that first experience, I did learn the importance of buying textbooks as early as possible. Now that I am (I hope) a mostly fully realized adult, my compulsions are merely an extension of my personality. That is to say, I got to the college bookstore well in advance of the start of this semester.

I had, of course, seen the temporary booths spotted around the campus at semester-end. I knew that various bookstores were buying used textbooks from those students happy to be well rid of a particular subject and desperate for beer money. But I did not understand the economic model of the textbook industry.

I have a clearer understanding now. My textbook cost, for 5 low-level courses, was just under $400. That total does not include notebooks, a calculator for Mathematics courses ($140), pens, pencils, and a snappy messenger/book-bag to transport various books to and from different classrooms (okay, the bag was a Christmas present).

The prices are unconscionable. As I type this, sitting on my desk is a thin volume, “Chinese Religious Traditions”, which is the size of a 5 x 8 notecard, less than 125 pages in length, bought used, for $10. There are 5 such books for that one course. In algebra, according to the course syllabus, we will cover only about 40% of the book that cost me a cool $83, used. It was strongly suggested that I purchase the accompanying Solutions Manual (@ $33), which I did, only to find that the text has, in the back, the same answers as the solutions manual (only the odd numbers in both) . Could I return the solutions manual? “No, we only buy textbooks. I’m sorry“. Well, so am I. An English literature anthology that has been owned by at least three previous students, at least based on the different colored hi-liters, cost more than $100.

Today, as I enjoyed the luxury of a Saturday morning perusing my favorite web-sites, I discovered the root cause of the textbook valuation crisis. As always, an understanding of basic economics provides the answer. To wit:

one of the major causes of higher priced new textbooks is the used textbook market. For example, if the fixed cost of producing a textbook is $500,000 and 5,000 units of the book are sold each year for 4 years then each textbook would bear $25 of the fixed cost.

However, if, due to the used textbook market, only the first 5,000 units are sold and, in each of the remaining three years these same 5,000 units are sold as used textbooks, then the publisher still has the $500,000 in fixed costs spread out over only 5,000 books. Thus each new textbook bears $100 of fixed costs, resulting in higher retail prices for all textbooks. This example demonstrates what has been happening in the textbook market over the past several years: As the used textbook market has expanded so have the market prices of new and used textbooks.

Now there’s a revolutionary idea. Don’t buy the textbooks back, keep using the same edition until there is a significant change in the knowledge base, and the unit cost of the books will decrease.

To my admittedly cheap way of thinking, textbooks should have some value to the owner beyond the 3-month semester; after all, it used to be that way “way back when”. If the damn books don’t cost so much, they won’t have as much value in the “used” market. Then, maybe, my English anthology that is full of lovely poems might find a place in my bookcase. Perhaps it would provide a lifetime of enjoyment, providing insight for years beyond the classroom, and serving as a reminder of a joyous time in my life, especially since the three previous owners will not have had their chances to highlight every third line in various shades of pink, yellow, and green.

Hidden Costs I

When planning for the return to academe, the first issue addressed was the expense of the adventure. To my unpracticed eye, that meant tuition and fees. As an adult, there wouldn’t be the additional expense of lodging and meals, since the campus is a very short drive from my home, where my wife generally provides an optimal dining experience as long as I go to the grocery store.

It did not take long to understand the tuition is just the beginning. A few exploratory trips to the campus indicated that parking would be a major issue. My school is located in the middle of a medium sized city, surrounded by neighborhoods and narrow streets. As is true with other schools in similar settings, the surrounding neighborhoods are a mix of private residences and homes “ghettoized” into student housing. That is to say, homes built to house a family now provide residence for many more students than the architect intended. The consequence is that too many cars are forced to fight for parking on those beautiful narrow streets. To the city, this is a golden opportunity to enhance revenue through parking violations. An opportunity that the city does not ever pass up, to the consternation of the students and their parents. Indeed, students cannot register for classes, or even graduate, if parking tickets remain unpaid.

The school does provide access to parking facilities, doled out each semester by seniority, which means it is limited and expensive and not available to underclassmen such as myself. But, it is not as expensive as the rates charged by private landowners, for whom the laws of supply and demand provide validation of their economic beliefs every three months.

Having learned the hard way that the student approach to parking, i.e., park anywhere and let an adult worry about the tickets, is not the optimal approach, I have reluctantly arrived at the conclusion that I will have to pay the city for the right to park in one of its garages. This will, I calculate, add approximately $800 to the cost of education, per semester.

The Infrastructure of Learning

It didn’t take long to learn that going back to school means more than just buying books, reading them, and going to class. After three days, Wife began to express her displeasure about the fifteen or so books of various shapes and sizes that were taking over our den/living room. As well, it became clear to me that the dining room table would not be an acceptable substitute for the campus library. Although we live a mere seven minute drive from the campus, the logistical challenges are barely worth the trouble.

So, I began to understand that what I needed was a study center; an area to hold my textbooks, notepads, pens/pencils and ancillary equipment, computer and printer, and a place to study in relative tranquility, far enough from the telephone, televisions, and kitchen to allow for a modicum of concentration.

It only took two days to achieve. A nifty glass desk, with adjoining tower to hold computer gear, a cheap wooden bookcase, and few desktop devices to assist in the maintenance of order, and about 18 hours of hard physical labor as I moved “stuff” from the spare bedroom to the backyard shed. Of course, I needed to clean out and organize the shed, which took a day. Then the reorganization of the room. Followed by the assembly of desk, tower, and bookcase, which was a daunting challenge for this “less than handy” fellow. But, after two days of dreary work, I have established the learning center, the nook, the launching pad for my new academic adventure.

Now, to rebuild those study habits…….

“Life’s hard, son. It’s harder when you’re stupid.” — The Duke.

Education is a companion which no misfortune can depress, no crime can destroy, no enemy can alienate,no despotism can enslave. At home, a friend, abroad, an introduction, in solitude a solace and in society an ornament.It chastens vice, it guides virtue, it gives at once grace and government to genius. Without it, what is man? A splendid slave, a reasoning savage. - Joseph Addison
The term informavore (also spelled informivore) characterizes an organism that consumes information. It is meant to be a description of human behavior in modern information society, in comparison to omnivore, as a description of humans consuming food. George A. Miller [1] coined the term in 1983 as an analogy to how organisms survive by consuming negative entropy (as suggested by Erwin Schrödinger [2]). Miller states, "Just as the body survives by ingesting negative entropy, so the mind survives by ingesting information. In a very general sense, all higher organisms are informavores." - Wikipedia

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