Graph showing inelastic demand of textbooks

An Economic Argument for Economics OER

This guest post was written by John Lynham, grant recipient and project lead developing OER for the ECON 130 microeconomics undergraduate course at UHM.

One of the questions I sometimes ask students in my introductory Principles of Microeconomics class is “Why are textbooks so expensive compared to other books?”. Part of the reason is that the market for textbooks is not like the market for other books: the person who chooses the book isn’t actually the person who pays for it. Most of the time, when you want to buy a new book you go to a bookstore (or online), choose the book that you want and then pay for it. But with textbooks, the professor chooses the book and then the students in the class have to go out and pay for it. This creates a disconnect between the person demanding the book and the person actually paying for it. In economics jargon: demand is “inelastic” or less responsive to changes in price. If the price of a textbook goes up by 10% many professors might not even notice since they never have to buy the book themselves. In addition, for some reason I can never figure out, the Instructors’ Edition of the textbook that professors receive for free never lists the price of the book on the back…

It shouldn’t be too surprising then that textbook prices increased 300% from 1986 to 2004 but the prices of most other goods only increased 80%. One of the most popular textbooks for the class I teach has a list price of $249.95! You can buy a new hardback edition of Harry Potter and the Sorcerer’s Stone on Amazon for $16.16. I know which one I would prefer to read! In response to the exorbitant cost of textbooks, I started using a free Creative Commons (CC) licensed OpenStax textbook a few years ago. It’s a very good book, my students really like it, and I always encourage other faculty members to adopt it.

Photo by Alex Read on Unsplash

However, one of the barriers to adoption of this free textbook is that the more expensive textbooks come with a great online database of practice questions. It’s really important to have access to lots of practice problems in order to understand the material being taught. I have tried to get around this by having my teaching assistants come up with questions and upload them to Laulima (UH’s learning management system). My simple goal for the OER Project is to develop an interactive online database of practice questions for the standard Principles of Microeconomics course that will be available to any teacher that wants to use the free textbook. Hopefully the more barriers to adoption that are removed, the more faculty will make the switch to free CC texts, thus lowering the cost of attending college for students. By making demand more elastic, prices should fall, and there should be greater investment in human capital. If that sentence doesn’t make sense, take my class in the Fall!

Project Lead

John Lynham

John Lynham

John is an Associate Professor in the Economics Department at the University of Hawaiʻi at Mānoa, where he is also a UHERO Research Fellow. He is the Director of the Graduate Ocean Policy Certificate and an Affiliated Researcher at the Center for Ocean Solutions at Stanford University. His research interests are in environmental/resource economics, marine ecology and behavioral economics. John is a Pacific Century Fellow, class of 2012, and was honored to receive the Board of Regents’ Medal for Excellence in Teaching in 2013.

Posted by Billy Meinke