Breaking the textbook drug habit

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How rising text book prices mirror rising drug costs (NBC video, 3:15)

The price of textbooks has risen fifteenfold since 1970, three times the rate of inflation (see chart). Like doctors prescribing drugs, professors assigning textbooks do not pay for the products themselves, so they do not always take price into account.

textbook_prices
The Economist: Why textbooks cost so much, Aug. 16, 2014

Publishers “have been able to keep raising prices because students are captive consumers. They have to buy whatever books they’re assigned,” comments Nicole Allen, a spokeswoman for the Scholarly Publishing and Academic Resources Coalition.

Professors who care about their students’ expenses can allow them to use older editions of the textbook. The table below shows that the last-but-one edition can usually be purchased for a small fraction of the price of a new book, with even older editions often available for $0.01.

Book Price of new, most recent edition Price of used, older edition
Ross & Westerfield: Fundamentals of Corporate Finance $304 (11th ed.) $25.05 (10th ed.)
Berk & DeMarzo: Fundamentals of Corporate Finance $269 (3rd ed.) $4.30 (2nd ed.)
Brigham & Houston: Fundamentals of Financial Management $258 (14th ed.) $7.24 (13th ed.)
Bodie, Kane & Marcus: Essentials of Investments $225 (9th ed.) $5.00 (8th ed.)
Gitman: Principles of Managerial Finance (brief) $213 (7th ed.) $5.85 (6th ed.)
Ross & Westerfield: Essentials of Corporate Finance $208 (8th ed.) $8.25 (7th ed.)
Brigham & Houston: Fundamentals of Financial Management (concise) $202 (8th ed.) $6.33 (7th ed.)

Note: Prices of the most popular finance textbooks checked on Amazon.com on Nov. 28, 2015.

Unfortunately, publishers try to discourage professors and students from using older editions: While the content rarely changes from edition to edition, publishers often change the page numbering and the numbers in the end-of-chapter homework problems in order to force students to buy the most expensive book.

Professors can help their students by assigning readings by chapter or section title instead of page number. Secondly, professors can provide their own homework problems or use a homework website like Accepi to provide equal homework access to all students, irrespective of the book they bought, thus saving each student almost $200 and reducing their financial stress.

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