The Best Intro Econ Teacher I Know, Timothy Taylor Writes in...

He says:

You'll recall that some years back I set out to write a principles text. I've finally done it. In addition, I think this is the first book for the mainstream intro econ course that is available as a free download.

The publisher, Freeload Press, will earn revenue by selling advertising on the website where the book is distributed. Also, when you download chapters (as PDF files), the first couple of pages might be advertisements. There is a short registration form, but downloads are free. If someone wants an advertising-free, black-and-white paper copy, it's available for $30 at the website ($20 for a micro or a macro split). There will soon be a workbook up on the website to accompany the text, and a test bank is already available for instructors. The website for Freeload Press is http://www.freeloadpress.com.

Is an advertising supported approach a sustainable business model for a textbook company?

Comments

[Gabriel]

Very useful. Can we insist that any journalist writing about economic data, and in particular any wearing the badge of "Fact Checker," be required to memorize chapter 24, on inflation? These paragraphs were Taylor-made for the Washington Post:

Adjusting Nominal Values to Real Values

Looking at economic statistics without considering inflation is like looking through a pair
of binoculars and trying to guess how close something is: unless you know how strong
the lenses are, you can’t guess the distance very accurately. Similarly, if you don’t know
the rate of inflation, it is difficult to figure out if a rise in GDP is due mainly to a rise in
the overall level of prices or to a change in quantities of goods produced. The nominal
value of any economic statistic refers to the number that is actually announced at that
time, while the real value refers to the statistic after it has been adjusted for inflation.

Nominal to Real GDP

The first column in Exhibit 24-6 gives the U.S. GDP at five-year intervals since 1960 in
nominal dollars; that is, in the dollars prevailing in each stated year. The second column
gives the price level over that time measured by the GDP deflator, which is the measure
of inflation based on a basket of goods that includes everything in GDP (using a base
year of 2000 for when the index number is set equal to 100).

If an unwary analyst compared nominal GDP in 1960 to nominal GDP in 1990, it
might appear that GDP had risen by a factor of eleven over this time (that is, GDP of
$5,803 billion in 1990 divided by GDP of $527 billion in 1960). But this calculation
would be highly misleading. As the GDP deflator shows, the price level in 1990 was
almost four times higher than in 1960 (the deflator for 1990 was 82 vs. a level of 21 in
1960). Clearly, much of the apparent growth in nominal GDP was due to inflation, not
an actual change in real economic activity.

To adjust nominal GDP into real terms, you need to factor out the inflation that has
occurred.

[Colin Danby]

The ads are jarring, but it's definitely better than paying $75 for an expensively-produced 800-page tome. No offense, Brad, but it has long struck me that covering the basics in a clear, patient way was something that a lot of people could do, and that the talents of brand-name economists were maybe better employed elsewhere.

One of the advantages for an instructor of this model is that it's easier to mix and match chapters, which gets me to a larger point: once you're freed of the necessity to print and bind, why should the online text so closely imitate a printed&bound text? Why not instead reconceptualize as a website with

- animated graphs
- little models you can play with
- depth: imagine a set of overview chapters, each of which links to chapters that unpack the ones above in greater detail or more mathematical rigor.
- links to case studies
- links to real-world data sets so students could use them in answering questions.
- many, many more exercises than are included in a normal textbook, including ones you can answer online with instant feedback.
- links to public websites and/or to discussion boards where students can interact with students in other places.

And so on. None of this would be cheap to maintain which gets us back to the business-model question, but if you could save tens of thousands of students a year the $60-$100 they are likely spending on the text and ancillary stuff, there has to be a way to make this work.

[malcolm]

I once listened to one of Taylor's lectures on tape and decided I must be a pretty good teacher since I taught the
material pretty much the same way he did!

[Glen]

I had Tim Taylor for Econ 1 back when he was a lecturer at Stanford in 1990. He is an amazing teacher. I was so excited about economics that I almost pursued it as a profession (until I had the econometrics class from the grad student whose accented English I couldn't understand).

[save_the_rustbelt]

Now I have a dilemma.

With limited time should I:

download fine econ book

download MLB steroid report

Wife-unit will not allow two, chores do await.

[save_the_rustbelt]

Hold the presses.

Hermanson put his accounting text up here (it was fading in a overcrowded market).

Given the price ($140 or so) of a Principles of Accounting text this is major development.

Can we finally take a chunk out of the publishing pirates?

[Jacob]

R. Preston McAfee of Cal Tech already has a free principles of economics textbook online; http://www.introecon.com . The textbook is all mathematical, with very little 'principles' of any sort ; an abomination to economic thought in my opinion, so much economic thought best displayed in words is forced into the way to small garb of mathematical notation (and the very economic thought in my opinion is misguided!); yet still a free textbook is a free textbook! One can learn so much economics for free online, however my personal method of learning economics would be to read HUMAN ACTION by Ludwig von Mises, then take a micro and macro course at university. You can find Human Action for free online at the Von Mises Institute.

[Lee A. Arnold]

"Is an advertising supported approach a sustainable business model for a textbook company?"

I think about this a lot. The college market is liable to be almost entirely supported by internet advertising revenue: but going directly to the WRITERS. It remains to be seen whether textbook companies will even stay in business, but I'm guessing it will be very difficult, since they cannot provide sole and exclusive guarantees of intellectual quality.

There are two different markets, K-12 and college, and of course, there are different subjects to teach.

The K-12 curriculum is presently locked-in by state standards, school board purchasing, and harried teachers. Textbook companies may have a better chance at surviving here, due to the need for comprehensive coverage within age-progressing gradations. But the delivery system is going to the internet, since that saves money over hardcopies, and on-line advertising that targets children is likely to remain unacceptable to most parents. I think we will see the arising of free textbooks that are written by experts for the public good, (there are plenty of teachers at it already,) and vetted by recognized committees of concerned parents and experts -- that is, committees that become recognized for truth and impartiality. I'm not sure that the textbook companies will be able to compete in this. School boards will finally go for it, because it will be free.

The college market is very different, since professors are already freer to pick what they want. But here again, I think it's going to be very hard for textbook companies to stay in business, even for introductory courses. The competition will be among authors as sole proprietors, and the competition will be furious. You can already sell your own ad space on a web-page of course, and it may get even easier and automatically updated: If, for example, Google gets an automatic-auction system going to match advertising (both print and video ads) to context-sensitive environments, writers in general may derive automatic revenue from being hit by readers. (This will be true in entertainment too: broadcast studios as well as print publishers are about to be eliminated in the making of new product, completely disintermediated, and are likely to become rump companies deriving revenue from their backlog archives and libraries.)

New textbook writers, at least the prestigious ones, will do just fine -- only without the textbook company. Indeed anyone who is currently writing a book should think very carefully about retaining the copyright.

This gets us to the individual subjects, because some subjects don't change much, if at all: calculus, logic, philosophy, etc. can be introduced and taught right now using books which are out of copyright.

Romer did something interesting with Aplia: provide teachers with a panoply of classroom utilities including automatic test-grading and student-specific help prompts for the instructor. Here again however, there is likely to be a lot of competition coming down the road.

[Lee A. Arnold]

The reason I've been interested in these markets is because of Ecolanguage:

http://youtube.com/leearnold

The question for me for decades has always been: how to get this out to people.

Recently I've been talking to high-school AP econ. teachers, finding out what they do and need for the kids. The number of people making instructional websites is definitely accelerating, and they are almost all looking into animation. The use of animated charts and other sorts of graphics for instruction is about to become ubiquitous, especially across the sciences and math.

[Colin Danby]

Thanks Jacob. It's time for my annual plug for the Online Library of Liberty, which has more Mises than you can shake a stick at:

http://oll.libertyfund.org/index.php?option=com_staticxt&staticfile=show.php&person=195

and much, much more:

http://oll.libertyfund.org/index.php?option=com_staticxt&Itemid=28&a=all

stir in the texts put up by the Marx Archive:

http://www.marxists.org/index.htm

and you've got ... well, you've got rather a lot of reading. Any more nice archives out there we should know about?

[robertdfeinman]

Another question that could be asked is whether textbooks are appropriate for college courses?

Before the Xerox machine and the internet a text book was a way to gather material into one place as a convenience for the student. Now it seems to be more of a straight jacket. If students are going to pay $100 for a book then asking them to seek out other material or only using it for a small part of the course will be resented.

When these students get out into the real world they aren't going to find material neatly packaged in this way, so why should they be spoon fed in college? Perhaps part of the point of a course should be getting students to develop the skills need to find and evaluate material.

Of course, for those who are teaching from an ideological point of view, this is exactly what they don't want. Spoon feeding the ideological pablum is the point. dissent and independent evaluation of sources are the antithesis of ideology. This seems to be more a problem is certain areas, economics and literature seem to be popular battlegrounds these days. Physics and biology not so much.

[Lee A. Arnold]

Here is Open Yale, free introductory courses from Yale:

http://open.yale.edu/courses/index.html

The physics course has reading assignments from an Addison-Wesley textbook in addition to video lectures and classroom notes. It does not appear that the textbook is provided.

A textbook publisher might want to fund this sort of thing as a way to sell textbooks -- but again, I think it's an interim strategy on the way to going out of the publishing business. With direct internet ad revenue, there will be no way to prevent new textbook writers from cutting publishers out of the revenue stream.

However, internet advertisers will demand an assurance that their advertising is going on quality written and video product. There would no longer be the assurance of quality that was provided by the brand of the publishing house. So there may arise a new sort of private quality-control board, perhaps a profitable business, that provides a seal of approval. Even this will be subject to competition, though.

[Lee A. Arnold]

And here today comes word that Google is creating "Knol" to go up against Wikipedia. The articles will have bylines, Google itself has offered the possibility that revenue-sharing from on-page ads will eventually be made available:

http://googleblog.blogspot.com/2007/12/encouraging-people-to-contribute.html

The reader comments at Slashdot, while uneven in quality, manage already to touch upon many of the supply/demand issues raised by on-line publishing, expert materials, and revenue models.

http://slashdot.org/article.pl?sid=07/12/14/1323221

The Wikipedia article for "Knol" is already here:

http://en.wikipedia.org/wiki/Knol

Of course, there is no reason to restrict this sort of thing to single-page articles. We are still at the very beginning of the cultural evolution of the noosphere. I find it to be just fascinating stuff, so I'm sorry for going overboard!

[Lee A. Arnold]

Update: Metafilter links to a TechCrunch post, discussing the position of the Google business model vis-a-vis Knol:

http://www.techcrunch.com/2007/12/14/google-knol-a-step-too-far/

Not really much off-topic: TechCrunch and (most of) its readers' comments fail to recognize Google's current problem, which is that it has an ad revenue system already half in operation, but there is not enough good content on the web to provide big-time advertisers with the assurance that they will be seen by quality eyeballs.

In short, the web isn't really here yet; it needs to be ramped-up a little more.

Once this is done, however, Google hardly needs Knol: it can sell context-specific revenue sharing to all advertisers and content-providers, no matter what sort of page they're on. Academic texts, bloggers, you name it.

If I were in the business of hoping to make money from on-line textbooks, I would try to talk to Google, right now.

Not much further off-topic, but instructive: It's becoming clearer to my screenwriting friends here in Los Angeles that THIS is the primary reason the studio producers are not going for any deal with the Writers Guild. The studios are claiming they can't see the business model for internet revenue! What is really happening is that Rupert et al. bought Big Old Media companies and now are scared to death that Google will dominate all world advertising delivery, putting Big Old Media out of business. (No one here will cry much.)

The studios have to stall, until Newscorp et al. figure out a way to monetize things like MySpace, which also builds a database of individual preferences that could be leveraged to help compete with Google's attractiveness to advertisers who want to target specific eyeballs. Because new creators are going to end-up owning their content 100%, anyway: the only way for non-creators like Murdoch to stay in the game is to take a piece of revenue from the advertising purveyance.

The alternate strategy is to buy quality ad-purveyance brands, like the Wall Street Journal. But the coming Google revenue system may make it more lucrative for individual journalists to LEAVE the paper, continue writing in their specialties, and be reaggregated by topical webpages and even great blogs, which also share the revenue. This is how I already find the best and most interesting stuff -- filters and re-aggregators. I don't read the Journal, and I'm not convinced it was a smart buy. "DeLong" is one of my trusted brands.

[everyone loves parfait]

In 25 years the equivalent of all the world's textbooks will be online, for free, readable by 99% of the world's population (i.e. translated), with no advertisements, in high quality using animation, charts and all the bells and whistles available to online content, with that content updated and expanded where applicable. The technological means are available. The content, obviously, already exists. All that is required is funding and a group of people to manage the project and make it happen. I would be hard-pressed to think of a better way for the UN and similar entities to spend their money.

Not only can it happen, it will. It's inevitable.

[Renee]

Advertising sounds like a great idea to offset the high cost of textbooks, and from what I call of my econ classes, all textbooks are filled with case studies of businesses and countries that have had experiences which illustrate the lesson at hand. Why not let sponsors pay to be featured as a case study?

[andres]

I would add to Colin's post that the Marxists.org website not only contains all of Marx and Engels' densely padded prose, but also the only online version (so far) of J.M. Keynes' General Theory as well as a few other non-Marxist writings, so it's definitely worth the occasional browse.