A Report on the Feasibility of Textbook Rental - IBHE

different printed text, an e-book or custom materials that are actually LESS expensive than anolder version used for the previous adoption cycle.• Page 16, para. 1 – “New editions close the market on used textbooks…” – New editions mayREDUCE demand for an old edition but old editions are still bought and sold by textbookswholesalers and bookstores, as indicated by this statement from the website of MBS, thecountry’s largest used textbook dealer: “Old editions, dropped adoptions, and low-value titlesdon't have to be a nuisance during buyback time. If you're signed up for MBS Custom Buybackand we find late-breaking national demand for previously unlisted or "problem" titles, we'll pricethem accordingly so you don't have to turn them away.”• Page 16, para 2, lines 4 and 5 – “Zogby International asked students…” -- Replace “students”with FACULTY. “The students responded:” Replace “students” with FACULTY.Textbook Spending• Page 16, para. 1, lines 3 and 4 – “The Association of American Publishers disputes the GAOfigure…” – This is a misquote by a reporter. AAP does not dispute the GAO figure, as it iswritten to include textbooks and supplies. AAP’s figure only accounts for the price of textbooks– not textbooks and supplies. See Appendix D.• Page 16, para 2 – IBHE’s estimated rental costs appear to include only the figures for textbooksand do not include additional course materials.Used Market, page 18Used textbooks may save students money in the immediate term but they are not a panacea. In the longerterm, used book sales actually increase the cost of all textbooks. Two economists, Dr. Michael W. Brandlof The University of Texas at Austin and Dr. Monica E. Hartmann of the University of St. Thomas inMinnesota, have both addressed this topic.Dr. Hartmann, a member of the Minnesota Textbook Task Force, provided the following assessment:“The growth of the used book market, 1 particularly through the Internet, and the role fixed costsplay in pricing decisions explain why prices of new textbooks are rising and are expected tocontinue rising in the future. Publishers only earn profit on the sales of new textbooks, not on thesales of used books…The drop in new book sales reduces the number of book over which apublisher can recover its fixed costs, raising the average cost of production and consequently theprice the publishers must charge to break even or earn some profit. This is not expected to changein the future given the popularity of used books.” See Appendix E.Dr. Brandl’s comments are from a newspaper column he wrote in 2004:“There is a fallacy of composition at work when college students sell back their textbooks. Ascontradictory as it may seem, by attempting to save money, students are actually helping to pushtextbook prices higher.“Here is how. Textbook publishers have fixed costs that they must cover in order to stay inbusiness. Let’s say for the sake of argument these fixed costs total $50,000. If they sell 1,000textbooks the fixed cost part of the textbook price is $50. Let’s assume they sell 250 textbooks ineach of four semesters. The textbook company then sells the textbook to the bookstore for $60each. Assuming a fairly conservative markup, college bookstores would then sell the textbooksto students for $80 each.1 Used book sales account for one-third of the total textbook sales and this does not even include those books “sold”on student run swap sites.-77-