Wednesday, August 19, 2015

Textbooks are a bargain

Compared with Harvard tuition, that is, according to Irwin Collier:
Excerpts from the Harvard Catalogue for 1874-75 with principal texts.... Incidentally, one finds that annual fees for a full course load at Harvard ran $120/year and a copy of John Stuart Mill’s Principles cost $2.50. Cf. today’s price for N. Gregory Mankiw’s Economics which is $284.16. If tuition relative to the price of textbooks had remained unchanged (and the quality change of the Mankiw textbook relative to Mill’s textbook(!) were equal to the quality change of the Harvard undergraduate education today compared to that of 1874-75(!!)), Harvard tuition would only be about $13,600/year today instead of $45,278.

In other words, over the past 140 years, textbook prices have risen only 114-fold, whereas Harvard tuition has risen 377-fold. 

Over this period, the CPI has risen 22-fold. So the real price of textbooks has increased about 5-fold, or a bit more than 1 percent per year.