Archive for January, 2012

How is a Textbook Like an MRI? [updated]

| Gabriel |

[update 1/30/2012, added a reply from Sage and my further comments]

Yesterday I got the “Sociology” and “Research Methods, Statistics, & Evaluation” catalogs from Sage and I noticed something interesting about them. Let’s take a look at a page together and see if you notice what interested me. (click to get a full-size pdf)

Here’s a hint, they starts with “$” and they ain’t there. The vast majority of the titles in the catalog don’t have any prices. This is odd. Generally one of the most salient pieces of information about any market commodity is the price and that includes books. If you search Amazon for these same titles you will see that Amazon makes the prices pretty conspicuous. Nor is there some unique delicacy of academics that Amazon is boorishly overlooking. If you look at the sociology catalogs for PUP or UC you’ll see that there are prices throughout. So why doesn’t Sage provide prices?

If you understand the book market you may be able to guess, but let’s take a look at another page from the Sage catalog for really conclusive proof.

This page has prices. As you may have noticed the tab on the edge helpfully notes that these are books “For Your Bookshelf.” In contrast, the (much more numerous) books that are described as “Recommend to Your Students” or “Textbooks” do not have prices. We can fit PUP and UC into this pattern insofar as they’re academic presses, not textbook publishers, meaning that in Sage’s terminology every book offered by PUP or UC is “For Your Bookshelf” and thus deserves to have a price attached. (Academic presses like PUP and UC certainly don’t object to course adoption, but the books are primarily written for an audience of colleagues and course adoption is a valuable crossover market).

Generally, the pattern is that when somebody else is paying you don’t care about the price. When I adopt a book for course adoption it’s my students who pay. Of course it’s almost inevitable that I’m going to be less price sensitive when choosing a book for course adoption than if I were buying 120 copies out of pocket. What amazes me is how brazen Sage is in not even putting the price in the catalog when my students are paying but doing so when I pay, a not so subtle hint that I should be completely indifferent to how much my students pay although obviously I’ll care when I pay. This is not unlike the critique of health insurance underlying HSAs: third party payment in medicine, as in textbooks, discourages price sensitivity and by extension leads to cost creep. This is sometimes taken to the extreme that doctors never quote patients the price of an MRI (or whatever it is they are referring/prescribing) and often can’t provide price information even if the patient asks. Even if the third party payment problem is intrinsic (I can hardly imagine the pedagogical nightmare of students choosing their own textbooks), we can at least hope for the people making allocation decisions to be responsible proxies. It doesn’t help when the sellers don’t even reveal the price and the proxies evidently don’t care that this information is absent.

Update, Sage Publications sent the following reply, which I am reproducing with their permission:

SAGE is actually very happy to tell our story on pricing. In terms of the market, we are actually on average 10-30 percent lower than our competitors. We listen when our professors meet with us and say that one of the first things they look at is price when deciding what books to adopt.

So, why aren’t the prices included throughout the catalog?

SAGE designs its catalog for multiple markets—including international markets like Canada and South America. The only sections of these catalogs that we typically customize for specific markets are our recommendations for professors’ personal library—which as you mentioned include the pricing. To help us maintain consistency and keep costs down, we like to only design one catalogue for multiple markets.

Additionally, you’ll find that we try to drive professors to our websites where they can not only sees the prices, but also reviews from other professors about their experiences with each book.

We understand your concern and certainly don’t want to appear to be hiding our prices. We’re actually quite proud of them! In the mean time, we’re taking your arguments into account as we start working on our newest catalogues.

Here’s my reaction to their (very thoughtful) reply. First, I haven’t systematically compared their prices to rivals but my general impression is that their prices are indeed on the low side so good for them. Second, they provide a plausible explanation for the absence of prices, which is that it allows them to share materials across markets. This may have to do with price discrimination or it may have to do with menu costs of multiple currencies but in either case the multiple markets thing doesn’t bother me. Nonetheless, it does show that pricing is a relatively low priority. That is, let’s give them the benefit of the doubt and accept an explanation other than deliberate obfuscation, even so this shows the issue to be one of relative indifference easily swamped by other concerns. I am glad to hear that they’re open-minded about this and I hope that in the future they include prices in the catalog itself, or if it is unfeasible to customize multiple versions, a price sheet insert.

January 20, 2012 at 5:54 am 3 comments

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