Higher Education Opportunity Act and Textbook Prices: Theoretical Approach

Section 133 of the Higher Education Opportunity Act (HEOA), which took effect on July 1, 2010, requires academic institutions to supply textbook information on their courses at the time students register for the courses. One of the rationales for this provision is that it gives students extra time to purchase the textbook from suppliers other than a college or university textbook store. It is argued that this should put a downward pressure on prices in the textbook store. This paper constructs a theoretical model to check the validity of this argument. The findings indicate that this policy does not necessarily reduce textbook prices. On the contrary, under some conditions the textbook prices in college and university bookstores could increase. Given that students and parents often complain about the cost of textbook prices, examination of this issue is well-warranted and has important implications for consumers and policymakers.