Now that we’re almost a month into the semester and starting to worry about midterms, it’s easy to forget the biannual pain of purchasing textbooks. The National Association of College Stores estimates that, in the 2008-2009 academic year, the average college student spent $667 on “course materials” – namely, textbooks. The increasing cost of textbooks is a serious problem for college students, and one many might not think about until they see their required book list first semester of freshman year. However, it’s possible to improve the situation.

The market for textbooks is a remarkably inefficient one. The inefficiency arises from the fact the party making the decision about what to purchase isn’t the one bearing the cost of that purchase. Specifically, the university (professors) chooses a book, but, since they aren’t the ones actually buying the book, they don’t need to take cost into account. For example, there might be a textbook that is 5% “better” than the other competing textbook but costs twice as much. The university might choose the “better” one, even though it might not actually be worth the extra cost.

Perhaps the most frustrating example of this situation is when a professor writes his or her own textbook, then proceeds to force students to buy it. Even worse is when the book is barely used. While their textbook could be of good quality and fairly priced, this is clearly the antithesis of a competitive market.

The solution to this inefficiency, then, is to make the person who buys the textbook the same person who decides which one to purchase. One way to accomplish this would be to have students decide which book best suits their needs. However, this approach doesn’t seem optimal, since the students likely don’t know enough about the subject matter to sufficiently evaluate a text. This could be partly remedied by having teachers post a list of several books to choose from. It seems, though, there is also some utility to be gained from having an entire class using the same book. This allows the teacher to assign definite readings rather than suggesting a broad topic that will be covered.

The other option, which I contend is the better one, is to have the university pay for students’ books. The mechanism for this is relatively simple: the university raises tuition by the average cost of textbooks per student per year, which is likely around $650-$700. Professors still have input into the book selection, but they must get the choice approved by an independent body.

Then, if the university spends less than they raised in tuition, they get to keep the extra money, thus giving them an incentive to choose economical books. Each year, a panel evaluates spending, and can choose to adjust the “textbook tuition” based on the previous year. What will likely happen, then, is that the university will charge less and less each year as they get better at finding textbooks that are both high quality and cost-efficient. As time goes on, students will find themselves paying less toward textbooks – clearly a desirable outcome.

In a market such as the one for textbooks, market power will always play a significant role. Because of this, it’s unlikely that the market will ever be particularly close to perfect. But it can be improved vastly from its current state. Common sense reforms like this can go a long way toward controlling the cost of education.

Joe Timmerman ([email protected]) is a sophomore majoring in math and economics.