Sticker shock

by Henry Farrell on December 3, 2004

“Dan Drezner”: recommends Kenneth Waltz’s Man, The State and War as one of his December books of the month. This reminds me of something that I’ve always been curious about – the eyepopping price of Waltz’s even more influential Theory of International Politics (only $73.43 in paperback to you mate, with free Super Saver shipping). It’s not so expensive because there’s low demand – every graduate student in international relations has to read it. So is this just a simple case of gouging by the publisher, or is there some other reason why it’s so expensive?[1]

Update: “Alex Tabarrok”: at Marginal Revolution suggests that the problem is that these are textbooks assigned by professors who don’t have to buy the books themselves, and draws an analogy with health care. My best guess is that this isn’t the problem in this case – I don’t think that “Theory of International Politics” is usually assigned to undergraduate classes (it’s pretty dense, with lots of philosophy of science discussion _inter alia_). Instead, as Daniel suggests in comments, it’s more likely to be an inelasticity of demand problem – pretty well every serious IR academic has to have a copy on his or her shelves. If there’s an analogy to healthcare, it’s not that the key decisions are made by the people who don’t pay the costs, it’s that (like life-saving drugs etc), the demand is inelastic enough that suppliers can extract substantial rents.

Update 2: “Matt Yglesias”: describes my comment that “it’s not so expensive because there’s low demand” as being ‘rather naive’ – he’s misunderstanding what I’m getting at here. Academic presses do sometimes publish books for which there’s low demand, and need to charge a lot for each individual copy of the book in order to recoup their costs. What I’m saying is that this very clearly isn’t one of those cases. As Matt (and d-squared, and I) suggest, the probable reason why Waltz’s book is as expensive as it is because of inelasticity of demand with respect to price. Basic monopoly pricing, in other words.

fn1. Robert Keohane and Joseph Nye’s similarly indispensable Power and Interdependence lends support to the price-gouging hypothesis – it’s $65.60 in paperback.



rob 12.03.04 at 3:20 pm

The price of similarly essential textbooks elsewhere – living in a university town with a large bookshop mostly catering to the students – leads me to believe it’s gouging. Staff don’t help by sometimes demanding that you buy their vastly expensive textbook to do their course. Students are captive markets, of course it makes sense to gouge them.


TW 12.03.04 at 3:30 pm

From what I hear, Columbia University receives the royalties from Man, the State, and War; Columbia University does (this is the result of Waltz writing the book while on Columbia funding, I think). Waltz probably wanted to get massive royalties from Theory to make up for getting none of those royalties from his earlier book. I doubt he feels that guilty.


nick 12.03.04 at 3:38 pm

Textbook gouging, pure and simple. There have been cases of arbitrage where people take advantage of or Canadian booksellers offering much lower prices on texts that aren’t student essentials outside the US.

This, though, isn’t one of them: and I suspect, too, that in the year since that NYT story appeared, overseas prices have been ramped up to prevent such things occurring.

That said, BookCentral (the site named in the story) has Waltz’s book at $44.98.


dsquared 12.03.04 at 4:00 pm

every graduate student in international relations has to read it

The words “has to read it” are probably the clue here. Interestingly, the first person to realise that academics’ demand for certain kinds of publication are effectively completely price-inelastic, was Robert Maxwell; Pergamon Press’s control of a few key scientific journals and adventurous pricing policy laid the foundations of Bouncing Bob’s fortune.


rob 12.03.04 at 4:14 pm

I’ve heard it claimed, although I can’t be bothered to follow it up to try and find proof, that lots of journal publishers have realized that the market for journals is really price-inelastic (both in terms of supply and demand) and are gouging both the academics who write for them and the libraries which buy them.


John Thacker 12.03.04 at 4:18 pm

dsquared is quite correct. Problem 1 is that the professor forces his students to read textbooks, in effect buying it with the students’ money. Some professors do take into account price when assign textbooks (or when publishing their own), but not all of them. Problem 2 is that academic book demand, whether high or low, is highly inelastic. The only people who buy the book are people who will buy it almost no matter what. Lowering prices doesn’t sell many new books; raising prices doesn’t cause many fewer to be sold.

Inelastic demand + people making decisions with other people’s money = high prices.

Academics have to change their behavior in some way.


Acad Ronin 12.03.04 at 4:19 pm

1) Many textbooks come with all sorts of web support and other add-ons such as test banks and test preparation software, downloadable readings, and the like.

2) The publishers are trying to capture part of the resale value. A textbook may be good for 18-24 months, or 3 to 4 offerings of a course, and sometimes more. That means one book may serve several students serriatim, and the publisher (and author) want to catch that. Of course, that means that students have to sell their books if they are to recoup part of their cost. Net-net, it is pretty much only PhD students who get fully screwed as many end up keeping key textbooks.


Sebastian Holsclaw 12.03.04 at 4:43 pm

In academic textbooks there is often the further problem of rearranging the material just enough to publish a new edition. This discourages the purchase of used books.


rob 12.03.04 at 4:44 pm

But lots of publishers issue new editions quite frequently, often frequently enough to mean that the new edition is out by the time that the book can be sold, and then often, secondhand bookshops won’t take them. Particularly when the secondhand bookshop is attached to the main academic bookshop.


Anthony 12.03.04 at 4:56 pm

Acad Ronin – textbook prices were rather high back in the 1980s when all the stuff you mention in your point 1 was not provided.


DJW 12.03.04 at 5:12 pm

I was told he got such a raw deal on the royalties for Man, the State and War, which sold tons of copies, that he intentionally sought out a textbook publisher, rather than a University press, which would have kept the paperback cost in the 20-25 range, but brought in less profit.

Most non-superstar academics want the prices of their books to be low, so more people will buy them, read them, assign them, etc. Even if that means less royalties–a book widely read in their field (assuming it’s not particularly bad in some obvious way) will do more for their careers than a few hundred extra dollars in royalties. The likes of Kenneth Waltz are pretty exceptional here.


Zaoem 12.03.04 at 5:13 pm

I suspect that in addition to the reasons mentioned above, it also matters that international relations scholars tend to have a taste for owning books. This explains the longevity of the high prices, as there should be an active 2nd market that competes for a book that has been a classic for so long.

My advisor wrote a “must-read” in political economy/American politics that was priced at $85 by the publishe. It ended up not being sold much although it was assigned in every graduate program across the countr, instead becoming one of the most frequently copied books among graduate students. Finally, the publisher reversed its initial stance, came out with a cheap paperback version, and started making more money.


Boffo 12.03.04 at 5:20 pm

Yes, inelastic demand plays a large role. It should also be noted that for your typical academic title, the author/professor has little control over the pricing, especially for first books, and so I hesitate to lay blame at their feet. (Often even the question of hardback/paperback is out of the author’s hands.)

The other variable to be considered is that university presses are never big money makers, and especially lately have run into hard times. The strategy, quite overtly, is to make money off a few big sellers like the ones mentioned in order to pay for most of their catalog, which are money losers for the most part.


Jason Orendorff 12.03.04 at 5:27 pm

Every seller of any good charges as much as he can get for it. “Gouging” occurs not because of greed alone, but because the market sets an outrageously high price. (All sellers are greedy.) So why the high price?

In this very specific case, it appears the book has been out of print since 1979. The supply is fixed and demand (as you mention) is high.

In the case of textbooks in general, it’s because volume is low, so costs have to be amortized over a small number of sales. “Every graduate student in international relations”, for example, is in fact an extremely small print run for a book.


novalis 12.03.04 at 5:41 pm

rob, according to MIT Technology Review, the Journal of Inorganic Biochemistry costs over 2 grand a year. I heard six months ago that a certain brain science journal cost ten times that, but I can’t find a source.

Fortunately, it turns out that scientists are tired of paying these ridiculous prices, and are moving to open access systems in droves.


Lee Scoresby 12.03.04 at 5:42 pm

Theory of International Politics presents some special problems. One of them, the availability of some of the most important chapters in Neorealism and its Cricis, I mention here. I don’t believe Waltz gets royalties from that book, either.

The price of the new edition of Power and Interdependence, frankly, guarantees that my students read the same xeroxed chapter every year.


Lee Scoresby 12.03.04 at 5:42 pm

Theory of International Politics presents some special problems. One of them, the availability of some of the most important chapters in Neorealism and its Critics, I mention here. I don’t believe Waltz gets royalties from that book, either.

The price of the new edition of Power and Interdependence, frankly, guarantees that my students read the same xeroxed chapter every year.


Lee Scoresby 12.03.04 at 5:43 pm

Theory of International Politics presents some special problems. One of them, the availability of some of the most important chapters in Neorealism and its Critics, I mention here. I don’t believe Waltz gets royalties from that book, either.

The price of the new edition of Power and Interdependence, frankly, guarantees that my students read the same xeroxed chapter every year.


Ca**dreamin 12.03.04 at 5:48 pm

Yet another example of those in a position to profit taking advantage of those at their mercy.


Jacob T. Levy 12.03.04 at 6:02 pm

For those of us not in the know: what is the book’s genre? That is, I’m seeing some suggestions that it’s really a monograph in textbook’s clothing. There are lots of books that every scholar and graduate student in some given subfield has to own. Most of these are not published by textbook publishers such as McGraw-Hill, or at textbook prices. Usually the situation is as Alex describes it — the really expensive books are those that are used only or almost only in classroom instruction (stats textbooks, econ textbooks, law school casebooks, etc) and which the professors who assign them receive in endless free supply.

(There are also books that are really expensive because their print run is only a few hundred copies– a very few people and libraries want them, but want them intensely enough to pay the high price. Cambridge hardcovers in the Ideas in Context series, for example. But that appears not to be the case here.)

Widely-read monographs– even widely-read must-have monographs (Theory of Justice, Concept of Law, Imagined Communities, States and Social Revolutions, The Logic of Collective Action, etc)– don’t ordinarily get priced like this. I suppose the publishers perceive there to be some genuine price elasticity– marginal advanced undergraduates, marginal grad students or professors in neighboring fields, etc, who think a book is important to have but wouldn’t spend $70 for it.

There are a lot of books like that for me, at any rate. A small number of books within my core interests, or by particular authors, are must-have-at-almost-any-price. I prefer to have access to the most important books in areas of peripheral interest or by a bunch of other authors, but am actually quite price-sensitive about them because there are so many of them. I like having States and Social Revolutions on my shelf; but it’s not absolutely mandatory for me, now that my general exams are long-over, and if it had been $70 I would have read it in the library or sold it on the second-hand market after the exams. DO I understand correctly that TIP is that kind of book, and that the puzzle is why it’s not priced accordingly? If so, the answer can’t just be “price-inelasticity,” because there are so many other mongraphs that have a core of price-insensitive buyers but a large enough periphery of price-sensitive buyers to make $20-$30 prices more sensible than $60-$80 prices.

(In addition, of course, if demand were really price-insensitive, $70 is much too low a price to expect! For serious price-insensitivity, look at journals in the hard sciences published by for-profit presses.)


Jason Orendorff 12.03.04 at 7:01 pm

“Basic monopoly pricing”? “Theory of International Politics” is out of print. It can only be found secondhand, and there are numerous sellers competing on price and condition. Surely the price is high because demand is high.

As for books that are in print–I’m inclined to agree with Tabarrok. Your counterargument to Tabarrok seems to be “no, this book isn’t assigned to undergraduate students.” I don’t see how that’s relevant. Aren’t undergrad textbook prices just as high? They are in engineering (my field).


DJW 12.03.04 at 7:03 pm

Jacob, yes, I think you describe the book well–it’s the rare monograph with easily predictable high demand. A political theory comparison would be Political Liberalism–a (very) long awaited follow-up by a scholar who (perhaps a bit less so than Rawls) wrote a book that changed the landscape of the discipline.


Jacob T. Levy 12.03.04 at 7:50 pm

Jason, it’s not out of print; this isn’t an auction price for used copies. We’re discussing its list price from McGraw-Hill for new copies.


Henry 12.03.04 at 8:01 pm

Jacob – It’s an absolutely essential book for international relations scholars in general – probably the most influential (and controversial) book that’s been written in the field in the last forty years. Indeed, there are large chunks of it which are available in the “Neo-realism and its critics” volume which is, I suspect, what gets assigned to most graduate level courses, because of these price considerations. But most international relations professors – and a fair number of IR professionals – feel that they have to have it on their shelves.


Henry 12.03.04 at 8:45 pm

One other thing which I should mention is that in all fairness, academic presses do run a loss on a lot of their books, so to the extent that they have to cross-subsidize, the priciness of ToIP and other similar books is probably understandable.


Njorl 12.03.04 at 10:00 pm

“Fortunately, it turns out that scientists are tired of paying these ridiculous prices, and are moving to open access systems in droves.”

Heh, we don’t pay for crap, not after we get a job anyway. Now, the people who employ us are probably sick to death of paying the high prices.

BTW, $75 for a textbook is cheap. I checked the prices of my old physics texts, and their ranging from $80 for the Stat Mech to $186 for the 2 volume Cohen-Tannoudji Quantum book.


Giles 12.03.04 at 10:18 pm

Looking at the 28

Jackmormon 12.03.04 at 11:16 pm

Still a lowly graduate student myself, my impression is that the faculty is able to request (read, “insist”) that the library purchase books like this. And my experience has been that the professor will then check out the book for a semester or two, and every time the library requests its return, the professor will send out his or her assistant to renew it. Thus, perhaps, causing the library to invest in a second copy, as the book is clearly very popular…

(I’m not saying that many professors won’t buy the expensive books in their field, but the filtering of these costs through the research libraries must intensify the inelasticity-of-demand effect.)


ogmb 12.03.04 at 11:33 pm

One of the more quixotic aspects of the U.S. secondary education system. My experience at a German university was:

1. Professors offer a list of relevant textbooks that cover the material (there are many many books to choose from in intro/intermediate undergrad classes) rather than assign one. Homework problems are written by TAs rather than taken from the book.

2. University libraries have multiple copies of the most relevant books.

3. Professors or student associations sell typewritten lecture notes plus old exams at a token price (about $5-10).

The upshot is that any faculty should provide various means to acquire the material and aide (force) the students to find the optimal one. Being able to find good resources and separate them from the bad is a key learning experience, and it’s not accomplished if the instructor short-circuits the process and burdens the students with the costs.


mark 12.04.04 at 1:51 am

jEEEzus. That Waltz’s book commands that kind of price puts me in mind of the overpriced grilled cheese sandwich we were hearing about recently. Although a partially eaten, decade-old, dubiously blessed scorched amalgam of wonderbread and velveeta is probably the more intellectually rewarding of the two. Mysterious ways indeed.



artclone 12.04.04 at 3:33 am

61 “unread” copies on eBay for 17 bucks each plus shipping.


cheem 12.04.04 at 6:07 am

Gotta agree with njorl. $75 for a textbook is a bargain. Ashcroft and Mermin’s Solid State Physics? $127.95 from Amazon. Buying it from the college bookstore, it’s more like $180. Rudin’s Principles of Mathematical Analysis? $133 from Amazon. For a 340 page book.

You folks in IR get off easy.


Nate 12.04.04 at 2:59 pm

There’s always my solution to the problem. I photocopied the book and used a bound photocopied version for several years.

Then, I found, by complete fortuity, a $6 copy in a used bookstore one night, and even though it had some highlighting, I snatched it up.

But I’ve photocopied a few books whose price is inordinately high. I could never see paying $75 for a 150 page paperback.


rzg 12.04.04 at 8:50 pm

The big dogs/superstars do have some control over price, should they chose to exercise it. When Steve Gould published his final magnum opus on Evolutionary Theory (an academic/text book), clocking in at nearly 1500 pages, he wanted a price less than $40, and the publisher, Belknap, agreed. I suspect that there is elasticity in demand for scholarly books as evidenced by the price/success of Hawking, Dawkins, etc.


arbitraryaardvark 12.05.04 at 4:35 am

factors affecting supply curve:
cost of the first copy: did the guy write it for publish or perish reasons, or does he make a living as a writer? cost of the next copy – a cd version’s marginal cost would be about $1.
factors affecting demand curve: options may include sharing with a buddy, using the library copy, getting by with a previous edition, using a pirated copy, dropping the class, taking the class without buying the book, convincing the professor to use a cheaper book.
engineering books costs a lot because they are tools of the trade, means of production. but similar texts compete. here, if there is a monopoly in one book that is in fashion, there are fewer substitute goods.
I forsee a coming revolution in open-source textbooks for many college classes. If your course doesn’t have one, make that the semester project.
But if the lucrative textbook racket is busted up, other forms of income enhancement may crop up.
There may be some parts of graduate education that are not readily captured by a good online tutorial, and it is worth finding out more explicitly what those are.


Alan Bostick 12.05.04 at 5:27 pm

The US tax code might maybe possibly have a little bit to do with the situation. Try googling on Thor Power Tool Company v. Commissioner of Internal Revenue; you may find the results enlightening.


Nicholas Weininger 12.05.04 at 7:23 pm

arbitraryaardvark: agree re open-source textbooks. A long-term project idea of mine is to make a serious stab at putting together a usable open-source calculus book.

Calculus books, BTW, are a terrific example of Alex Tabarrok’s point, much better than any grad-level book could be. They are very substitutable– one book will cover pretty much the same stuff as any other in pretty much the same way. And the market is huge. So they should be a commodity good with elastic demand.

But they’re not; they’re eye-poppingly expensive, and the publishers, as Sebastian mentioned, introduce pseudo-new editions every few years to cut the legs off the used market. And it seems to me the principal reason that this works is just what Tabarrok says: the chooser and the payer are not the same and do not really have the same interests.


Lee Scoresby 12.06.04 at 7:48 pm

I just got off the phone with Ken Waltz. The price has nothing to do with his lack of royalties on earlier books. He wants the book to be cheaper, on the grounds that an academic should want as many people as possible to read his or her book.

TIP, however, is published by the textbook division. Ken can’t get a clear answer about why it is priced the way it is, so I suspect the arguments about textbook pricing and inelasticity (real or perceived) are at work.

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