Question A:
Most college professors who assign textbooks would not be able to guess, within 10% of the actual figure, the retail price that their students pay for new copies of those books.
Responses
Responses weighted by each expert's confidence
Question B:
Since students can resell college textbooks or rent electronic versions, the net burden on students is substantially lower than retail prices for new textbook purchases would suggest.
Responses
Responses weighted by each expert's confidence
Question C:
Even though the professors who select textbooks are different form the people who pay for them, the price of new edition college textbooks reflect classic forces of supply and demand.
Responses
Responses weighted by each expert's confidence
Question A Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
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 Daron Acemoglu |
MIT | Bio/Vote History | ||
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 Alberto Alesina |
Harvard | Did Not Answer | Bio/Vote History | |
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 Joseph Altonji |
Yale | Bio/Vote History | ||
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Faculty will know what their university book store charges but will not know about foreign editions
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 Alan Auerbach |
Berkeley | Bio/Vote History | ||
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 David Autor |
MIT | Bio/Vote History | ||
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 Katherine Baicker |
University of Chicago | Bio/Vote History | ||
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 Abhijit Banerjee |
MIT | Did Not Answer | Bio/Vote History | |
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 Marianne Bertrand |
Chicago | Bio/Vote History | ||
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 Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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 Raj Chetty |
Harvard | Did Not Answer | Bio/Vote History | |
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 Judith Chevalier |
Yale | Bio/Vote History | ||
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I have not seen a recent survey. I am reminded to list the price of the texts on my syllabus by the person in charge of HEOA compliance.
-see background information here |
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 Janet Currie |
Princeton | Did Not Answer | Bio/Vote History | |
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 David Cutler |
Harvard | Bio/Vote History | ||
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 Angus Deaton |
Princeton | Bio/Vote History | ||
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 Darrell Duffie |
Stanford | Bio/Vote History | ||
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Just a guess, based on my own experience.
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 Aaron Edlin |
Berkeley | Bio/Vote History | ||
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 Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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 Liran Einav |
Stanford | Bio/Vote History | ||
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 Ray Fair |
Yale | Bio/Vote History | ||
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 Amy Finkelstein |
MIT | Bio/Vote History | ||
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 Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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 Austan Goolsbee |
Chicago | Bio/Vote History | ||
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 Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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 Robert Hall |
Stanford | Bio/Vote History | ||
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I'd run a survey if I wanted to know
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 Oliver Hart |
Harvard | Bio/Vote History | ||
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My guess is that most pick what they think is the best book (or, of course, their own book) without regard to price.
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 Bengt Holmström |
MIT | Bio/Vote History | ||
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 Caroline Hoxby |
Stanford | Bio/Vote History | ||
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I am not aware of any data on this question so I would just be guessing.
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 Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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 Kenneth Judd |
Stanford | Bio/Vote History | ||
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 Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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Based on asking a few people what they thought a basic principles book costs. Most shocked to learn it is well over $200
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 Pete Klenow |
Stanford | Bio/Vote History | ||
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 Jonathan Levin |
Stanford | Bio/Vote History | ||
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 Eric Maskin |
Harvard | Bio/Vote History | ||
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 William Nordhaus |
Yale | Bio/Vote History | ||
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 Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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 Larry Samuelson |
Yale | Bio/Vote History | ||
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 José Scheinkman |
Columbia University | Bio/Vote History | ||
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 Richard Schmalensee |
MIT | Bio/Vote History | ||
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Seems right to me, but only based on my own experience.
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 Carl Shapiro |
Berkeley | Bio/Vote History | ||
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 Robert Shimer |
University of Chicago | Bio/Vote History | ||
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 Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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Need data to answer.
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 Christopher Udry |
Northwestern | Bio/Vote History | ||
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Since we have begun putting prices on our syllabi, it's become more likely that we would pass this test.
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Question B Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
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Daron Acemoglu |
MIT | Bio/Vote History | ||
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Alberto Alesina |
Harvard | Did Not Answer | Bio/Vote History | |
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Joseph Altonji |
Yale | Bio/Vote History | ||
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Alan Auerbach |
Berkeley | Bio/Vote History | ||
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David Autor |
MIT | Bio/Vote History | ||
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Katherine Baicker |
University of Chicago | Bio/Vote History | ||
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Abhijit Banerjee |
MIT | Did Not Answer | Bio/Vote History | |
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Marianne Bertrand |
Chicago | Bio/Vote History | ||
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Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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Raj Chetty |
Harvard | Did Not Answer | Bio/Vote History | |
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Judith Chevalier |
Yale | Bio/Vote History | ||
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Yes, of course the fact that one can (often) sell the new book back helps, but many students skip buying the textbook.
-see background information here -see background information here |
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Janet Currie |
Princeton | Did Not Answer | Bio/Vote History | |
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David Cutler |
Harvard | Bio/Vote History | ||
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Angus Deaton |
Princeton | Bio/Vote History | ||
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Depending on the meaning, seems either trivially true, or just unclear what is being held constant.
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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Most of the students I see seem to have new copies. Stanford may not be the norm.
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Aaron Edlin |
Berkeley | Bio/Vote History | ||
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Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Liran Einav |
Stanford | Bio/Vote History | ||
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Ray Fair |
Yale | Bio/Vote History | ||
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Amy Finkelstein |
MIT | Bio/Vote History | ||
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Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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Austan Goolsbee |
Chicago | Bio/Vote History | ||
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Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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maybe. it depends on several factors, including how active these markets are and the costs of reselling/renting
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Robert Hall |
Stanford | Bio/Vote History | ||
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...to a person who was unaware of the resale market (not me!)
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Oliver Hart |
Harvard | Bio/Vote History | ||
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This seems rather self-evident, although perhaps not all students can do this. Some people no doubt also photo-copy parts of books.
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Bengt Holmström |
MIT | Bio/Vote History | ||
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Caroline Hoxby |
Stanford | Bio/Vote History | ||
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It is costly to change a textbook much with each edition so students can use much cheaper past editions with little intellectual loss.
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Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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The resale market helps but does not change the net burden by much,
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Kenneth Judd |
Stanford | Bio/Vote History | ||
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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These factors help, but some students would like to be able to keep their books and that cost is much higher now
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Pete Klenow |
Stanford | Bio/Vote History | ||
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But new editions undermine this.
-see background information here |
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Jonathan Levin |
Stanford | Bio/Vote History | ||
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Eric Maskin |
Harvard | Bio/Vote History | ||
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William Nordhaus |
Yale | Bio/Vote History | ||
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Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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Larry Samuelson |
Yale | Bio/Vote History | ||
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The net burden is lower than the retail price, but still scandalously high.
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José Scheinkman |
Columbia University | Bio/Vote History | ||
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Richard Schmalensee |
MIT | Bio/Vote History | ||
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"Substantially" depends on those markets having few frictions, and I have no idea if that is the case.
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Carl Shapiro |
Berkeley | Bio/Vote History | ||
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Robert Shimer |
University of Chicago | Bio/Vote History | ||
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It would be useful to know what fraction of books are rented or resold.
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Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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Christopher Udry |
Northwestern | Bio/Vote History | ||
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See Chevalier, Judith, and Austan Goolsbee. "Are durable goods consumers forward-looking? Evidence from college textbooks."
-see background information here |
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Question C Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
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Daron Acemoglu |
MIT | Bio/Vote History | ||
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Alberto Alesina |
Harvard | Did Not Answer | Bio/Vote History | |
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Joseph Altonji |
Yale | Bio/Vote History | ||
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Alan Auerbach |
Berkeley | Bio/Vote History | ||
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David Autor |
MIT | Bio/Vote History | ||
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Only if you include agency problems among the "standard forces" of supply and demand.
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Katherine Baicker |
University of Chicago | Bio/Vote History | ||
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Abhijit Banerjee |
MIT | Did Not Answer | Bio/Vote History | |
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Marianne Bertrand |
Chicago | Bio/Vote History | ||
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Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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Raj Chetty |
Harvard | Did Not Answer | Bio/Vote History | |
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Judith Chevalier |
Yale | Bio/Vote History | ||
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Professors only partially consider price when choosing textbooks. And consider test banks and other perks.BUT students are P elastic.
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Janet Currie |
Princeton | Did Not Answer | Bio/Vote History | |
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David Cutler |
Harvard | Bio/Vote History | ||
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More than just classic supply and demand, though.
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Angus Deaton |
Princeton | Bio/Vote History | ||
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In some sense, this MUST be true. What else could it be?
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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Author-publisher search costs are high. Then, second-hand market aside, the publisher has a monopoly on the title, implying pricing power.
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Aaron Edlin |
Berkeley | Bio/Vote History | ||
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Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Liran Einav |
Stanford | Bio/Vote History | ||
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Ray Fair |
Yale | Bio/Vote History | ||
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Question too broad
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Amy Finkelstein |
MIT | Bio/Vote History | ||
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Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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Austan Goolsbee |
Chicago | Bio/Vote History | ||
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Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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Chevalier/Goolsbee research suggests demand is price elastic so not divorced from S & D but agency problem surely creates distortions
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Robert Hall |
Stanford | Bio/Vote History | ||
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Provided one takes a broad view of supply and demand--printed books are a sunset product, and thus pricey.
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Oliver Hart |
Harvard | Bio/Vote History | ||
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In some fields there will be a prominent book with few competitors. The author has some monopoly power; the equilibrium price may be high.
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Bengt Holmström |
MIT | Bio/Vote History | ||
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Caroline Hoxby |
Stanford | Bio/Vote History | ||
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There is an agency problem (instructors=agents, students=principals) but not severe owing to used books and student evaluations.
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Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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Kenneth Judd |
Stanford | Bio/Vote History | ||
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Product differentiation and lack of incentives for professors to make efficient choices make this unlikely.
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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I don't have a good story for where the market failure or market power comes from, but the relative price has gone way up.
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Pete Klenow |
Stanford | Bio/Vote History | ||
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Jonathan Levin |
Stanford | Bio/Vote History | ||
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Eric Maskin |
Harvard | Bio/Vote History | ||
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William Nordhaus |
Yale | Bio/Vote History | ||
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Text prices include bundled ancillaries which students pay for but are benefits for teachers.
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Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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Larry Samuelson |
Yale | Bio/Vote History | ||
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There are too many imperfections and frictions in this market to model it simply in terms of demand and supply.
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José Scheinkman |
Columbia University | Bio/Vote History | ||
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Richard Schmalensee |
MIT | Bio/Vote History | ||
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Carl Shapiro |
Berkeley | Bio/Vote History | ||
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Surely the prices reflect supply and demand, but not nearly so well as they would without the agency issues identified in the question.
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Robert Shimer |
University of Chicago | Bio/Vote History | ||
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But demand may be quite inelastic, since once a book is selected for a course, there are no substitutes.
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Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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When the chooser is not the user then bad outcomes are common. My views are captured here: http://bit.ly/1Cql4mR
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Christopher Udry |
Northwestern | Bio/Vote History | ||
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Difficult to interpret this question.
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