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This video (2:16 to 2:55) makes several rather serious claims in the intro, although it is somewhat believable.

The primary claims are that colleges and universities:

  • Conspire with book publishers to produce custom textbooks which change year-on-year, creating a monopoly;
  • Conspire to make last years' textbook obsolete with minor revisions or alterations, which stifles the used book market (see below);
  • Conspire to destroy the used book market (presumably with explosives?!)
  • By doing all of the above prices rise and the colleges take this in as extra funding

The source of the video is a biased source. So it must be taken with a grain of salt. But can we critically analyse this: is it true that there is a conspiracy here? Or, is it blown out of proportion - more likely, prices are high because the subject is a specialised area (low demand?)

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    I don't see why a conspiracy would be necessary. It seems to me it's simple enough for textbook publishers to do this on their own, without having to conspire with colleges. – Kyralessa Jun 29 '11 at 0:28
  • I don't think colleges make that much money off their bookstores – DJClayworth Jun 29 '11 at 1:25
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    I have seen teachers "conspire" with themselves by writing books and then having them as required course material. :-) Nice extra income. – Lennart Regebro Jun 29 '11 at 8:54
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    I think that when a publisher prints the price on a book which matches exactly the sticker barnes and noble puts on it (common), it is prima face evidence of price collusion. – horatio Jun 29 '11 at 13:33
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    Another comment on that video. IMHO what drives the rising cost of US higher ed is income disparity. Just like any other business, they charge what the market will bear. They have to. If they don't, people will think they are a lesser school and will stay away - snob factor is real. They try to offset this with need-blind admission and generous financial aid, but it's like a thumb in the dike. The cost is a function of what some people will pay - simple as that. – Mike Dunlavey Jun 29 '11 at 21:27
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The US Department of Education did a study on this and determined the cause for growing prices. The study says the problem is as follows:

The market for textbooks and learning resources is broken. Faculty select textbooks from publishers, bookstores order them, and students must pay. The end consumer has no direct influence over the price, format, or quality of the product. In the long term, the supply-driven, producer-centric market of today must be transformed into the demand-driven, college- and student-centric market of tomorrow.

This system is certainly set up such that a professor could easily request a high-priced book and the students have little say over it. Some professors I have had force you to buy the book, because they give out homework questions directly from the book. I've had professors require you to buy a book they wrote themselves because the homework questions are in it! You couldn't even buy the book used, because the professor had a new one published with different questions every year. The book was published directly by the university though, so there was no direct third party to conspire with.

However, I've also had professors who deliberately use old editions or let students borrow their copy of the book for homework, so I doubt this is a universal occurrence.

I've also had professors who don't really care much about the book and just tell you to get their favorite one as a reference if you need it.

The question is more specific to if the professors and university are directly conspiring with the publisher. While it appears as if the system is set up to favor the publishers and colleges to begin with, they are not conspiring with each other directly.

Oregon State University did a study on this and claims that:

College bookstores see the used book market as a service to their students but also recognize that their margin on used books (34.9%) is higher than new books (22.5%). This puts them at odds with publishers who see the used book market as a direct threat their livelihood.

So it would seem unlikely that bookstores would want to sale new books often, because they make more money on used books. This means bookstores are not likely to conspire directly with publishers or authors, who only earn money on new books.

However, it's important to keep in mind that all college costs are increasing significantly faster than inflation and textbooks are just another part of college costs. Non-textbook reference books can be costly as well, due to the labor-intensive nature of gathering reliable information and writing books. There is a certain element of inevitability with the high prices.

Is there a conspiracy going on across all colleges and publishers? I seriously doubt it. Are some professors and some publishers doing this? It certainly seems plausible it's going to occur at some point. The very nature of the system is such that it's easy to take advantage of students and people will inevitably do so. However, it seems to be more on a case-by-case basis than anything organized. It's that the system has already been set in place for prices to be arbitrarily high and it's easy for a professor to take advantage of it if she/he was the one to write the book.

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    "The market for textbooks and learning resources is broken. Faculty select textbooks from publishers, bookstores order them, and students must pay." In other words, it's exactly like the US health insurance system. For a free market country, it sure is interesting how many un-free-market things like this we have. – Kyralessa Jun 30 '11 at 3:05
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    "make more money on used books" wrong, they have higher percentage of margin, that doesn't translate to more money, as used books are usually lot cheaper. – vartec Jun 30 '11 at 8:11
  • of course a system in which every student has a different textbook is not workable either, as it creates chaos in the classroom. Might work for reference works (which most students won't buy anyway but borrow from the school library) but not for the actual textbooks themselves. That's one area where uniformity is a good thing. And the high price goes with it (though schools could do more to keep costs lower by agressively having publishers bid on contracts rather than having teachers just pick their own publications at whatever price the teacher and publisher want to charge). – jwenting Jul 1 '11 at 6:34

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