Why Are Textbooks So Expensive?

Wavebreakmedia/iStock via Getty Images
Wavebreakmedia/iStock via Getty Images

The beginning of a freshman’s college experience is an exciting time. Dining halls! No bedtime! Taunting your RA! Exorbitantly expensive textbooks!

Wait, that last one is no fun at all. It’s hard to make that first trip to the college bookstore for required texts without leaving with a bit of sticker shock. Why are textbooks so astonishingly expensive? Let’s take a look.

Publishers would explain that textbooks are really expensive to make. Dropping over a hundred bucks for a textbook seems like an outrage when you’re used to shelling out $10 or $25 for a novel, but textbooks aren’t made on the same budget. Those hundreds of glossy colorful pages, complete with charts, graphs, and illustrations, cost more than putting black words on regular old white paper. The National Association of College Stores has said that roughly 33 cents of every textbook dollar goes to this sort of production cost, with another 11.8 cents of every dollar going to author royalties. Making a textbook isn’t cheap.

There’s certainly some validity to this explanation. Yes, those charts and diagrams are expensive to produce, and the relatively small print runs of textbooks keep publishers from enjoying the kind of economies of scale they get on a bestselling popular novel. Any economist who has a pulse (and probably some who don’t) could poke holes in this argument pretty quickly, though.

In the simplest economic terms, the high price of textbooks is symptomatic of misaligned incentives, not exorbitant production costs. Students hold the reasonable stance that they’d like to spend as little money as possible on their books. Students don’t really have the latitude to pick which texts they need, though.

Professors pick the course materials, and faculty members don’t have any strong incentive to be price sensitive when it comes to selecting textbooks. Their out-of-pocket expense is zero whether the required texts cost $100 or $300, so there’s no real barrier to heaping on more reading material. If a student needs Class X to graduate, they’ll likely need to procure the required texts. This lack of cost-control incentives for professors is a major reason that at some point in college, everyone meets the expensive textbook’s even more maddening cousin, the Expensive Textbook You Never Even Use.

Moreover, many students aren’t all that price sensitive themselves. While the broke college kid is a beloved caricature, many students’ parents may still be footing the bill for school materials like books. Unless their parents raise a stink over a semester’s book bill, it’s easy to see how the textbook market could be one where none of the players actually have any strong incentive to be sensitive to prices.

Publishers also counter that widespread sales of used books cut into their bottom line. As eBay and Amazon have made the market for textbooks much bigger and more flexible, publishers lament that they’re losing out on sales, which necessitates higher retail prices for the new books they do sell.

Is there any truth to this argument? Maybe, but the effect may not be as great as the publishers claim. As economist Hal R. Varian wrote in The New York Times in 2005, it’s not totally clear that used textbooks are perfect substitutes for new ones. (Finding this piece absolved me of any residual guilt I may have had over selling Varian’s own excellent graduate microeconomics text on eBay last year.) As Varian puts it, used book sales probably cannibalizes less of the new book market than one might imagine.

Luckily for students, some external forces are placing downward pressure on textbook prices. Last year a new federal law went into effect that requires publishers to notify professors of textbook prices and schools to inform students of necessary course texts during registration. Online textbook rental companies could help replace outright ownership, as could electronic reserve programs. It may take a while, but in the future college students may be able to do the required reading without emptying their wallets.

Why Does Santa Claus Give Coal to Bad Kids?

iStock/bonchan
iStock/bonchan

The tradition of giving misbehaving children lumps of fossil fuel predates the Santa we know, and is also associated with St. Nicholas, Sinterklaas, and Italy’s La Befana. Though there doesn't seem to be one specific legend or history about any of these figures that gives a concrete reason for doling out coal specifically, the common thread between all of them seems to be convenience.

Santa and La Befana both get into people’s homes via the fireplace chimney and leave gifts in stockings hung from the mantel. Sinterklaas’s controversial assistant, Black Pete, also comes down the chimney and places gifts in shoes left out near the fireplace. St. Nick used to come in the window, and then switched to the chimney when they became common in Europe. Like Sinterklaas, his presents are traditionally slipped into shoes sitting by the fire.

So, let’s step into the speculation zone: All of these characters are tied to the fireplace. When filling the stockings or the shoes, the holiday gift givers sometimes run into a kid who doesn’t deserve a present. So to send a message and encourage better behavior next year, they leave something less desirable than the usual toys, money, or candy—and the fireplace would seem to make an easy and obvious source of non-presents. All the individual would need to do is reach down into the fireplace and grab a lump of coal. (While many people think of fireplaces burning wood logs, coal-fired ones were very common during the 19th and early 20th centuries, which is when the American Santa mythos was being established.)

That said, with the exception of Santa, none of these characters limits himself to coal when it comes to bad kids. They’ve also been said to leave bundles of twigs, bags of salt, garlic, and onions, which suggests that they’re less reluctant than Santa to haul their bad kid gifts around all night in addition to the good presents.

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Why Are Poinsettias Associated with Christmas?

iStock
iStock

Certain Christmas traditions never seem to go out of style. Along with wreaths, gingerbread cookies, and reruns of A Christmas Story sits the poinsettia, a red-tinged leafy arrangement that’s become synonymous with the holiday. Upwards of 100 million of them are sold in the six weeks before December 25.

Why do people associate the potted plant with seasonal cheer? Chalk it up to some brilliant marketing.

In 1900, a German immigrant named Albert Ecke was planning to move his family to Fiji. Along the way, they became enamored of the beautiful sights found in Los Angeles—specifically, the wild-growing poinsettia, which was named after Joel Roberts Poinsett, the U.S.-Mexican ambassador who first brought it to the States in 1828. Ecke saw the appeal of the plant’s bright red leaves that blossomed in winter (it’s not actually a flower, despite the common assumption) and began marketing it from roadside stands to local growers as "the Christmas plant."

The response was so strong that poinsettias became the Ecke family business, with their crop making up more than 90 percent of all poinsettias sold throughout most of the 20th century: Ecke, his son Paul, and Paul’s son, Paul Jr., offered a unique single-stem arrangement that stood up to shipping, which their competitors couldn’t duplicate. When Paul III took over the business in the 1960s, he began sending arrangements to television networks for use during their holiday specials. In a priceless bit of advertising, stars like Ronald Reagan, Dinah Shore, and Bob Hope were sharing screen time with the plant, leading millions of Americans to associate it with the holiday.

While the Ecke single-stem secret was eventually cracked by other florists—it involved grafting two stems to make one—and their market share dwindled, their innovative marketing ensured that the poinsettia would forever be linked to Christmas.

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