Ready for some economic nerdity?
Have you ever bought a book from Amazon.com?
If you’re anything like most netizens, chances are that you have; or you have at least browsed the site. Failing that, you’ve at least heard of the site.
On the slim chance that the reader is not an Amazon shopper, here’s a brief intro: one feature of Amazon’s bookstore is that you can also buy used copies of nearly every title you seek, from individuals or smaller bookstores; whoever takes the time to list their books on Amazon.
You might predict that the used books are cheaper than the new ones; generally, you would be absolutely right. However, that’s where economics, and the invisible hand of Adam Smith (no, not Smith’s hand, but the one he wrote about), takes over. One book might retail at $29.99 and the used copy for only $5.00… another might also retail for $29.99, but the used copy still fetches $21.99. What makes the difference?
There are at least two major factors I can see; the perceived quality of the book (I’m confining my thoughts to books here, but the idea could be extended to any difference between new/used goods), and the market saturation of the book.
By market saturation, I mean that if a given book is considered the top reference in it’s field, but if everyone who values it already has a copy, then used copies will begin to drop in price; not because the book isn’t good, but because it’s been around long enough that everyone in it’s target market already owns it.
For newer books, the difference can be an indicator of what the market sees as the actual value of the book. If my book is brand new and selling for $20 retail, but used copies are floating around for $2.00 each… I could probably take that as an indication that people who bought my book don’t value it very highly. And so forth.
As a test case, I decided to compare average new/used prices on books in a particular field on Amazon. In this case I chose to look at some Linux and Java books (hey, I’m a nerd. What do you expect?) In both cases, there are obviously too many books to make an exhaustive comparison; I picked some examples of very low price disparity and fairly high price disparity, to see if there is any obvious relation to the content of the book. This look is going to be highly biased, of course. Sorry, I can’t help it.
Linux books:
Low New/Used Price Disparity:
Linux Kernel Development, 2nd Ed., Ransom Love.
New: 29.69
Used: 22.00
Linux in a Nutshell, 4th Ed.,
New: 22.35
Used: 19.99
How Linux Works
New: 25.05
Used: 22.74
High New/Used Price Disparity:
Linux System Administration (Craig Hunt Linux Library)
New: 32.99
Used: 9.26
Linux Toys
New: 19.79
Used: 3.85
Linux For Dummies:
New: 29.99
Used: 0.48 (Yes, really. And that’s more than it’s worth)
Running Linux, 4th Ed.
New: 29.67
Used: 5.50 (This surprised me; I thought this was a pretty decent book)
Some thoughts on these comparisons… For starters, I have not read all of these books. I’ve read some of them, others I wouldn’t even bother with (Linux for Dummies? That might be a good book… to use for kindling). If a very simple Demand/Price ratio were assumed, we would think that those books with a low new/used disparity would be the ones which the consumers consider better books, and vise versa… and in some of these cases, that may be so. It could also be that some of them are older
(Running Linux, which sells used for $5.50 now, was published in 2003), and is already on the shelf of many Linux enthusiasts. There are obviously other considerations; if a book is a text book, and a new edition has not come out at the beginning of the following semester, it would probably keep a reasonably high value, even if it isn’t a “great” book, just because of the demand for it. More on this after looking at some Java books….
Java Books:
Low New/Used Price Disparity:
Effective Java Language Programming Guide
New: 29.69
Used: 27.98
Java in a Nutshell
New: 29.67
Used: 23.21
A Programmer’s Guide to Java Certification, 2nd Ed.
New: 36.69
Used: 32.00
Java: How To Program, 6th Ed. (Deitel)
New: 90.25
Used: 73.25
High New/Used Price Disparity:
Advanced Java 2 Platform
New: 83.29
Used: 18.95
Java, Java, Java: Object Oriented Problem Solving
New: 83.29
Used: 4.95
Java: How to Program, 5th Ed. (Deitel)
New: 90.25
Used: 20.00
Java For Dummies
New: 16.49
Used: 1.94
Many of these were no surprise to me… Java for Dummies, for example. ;-) It’s interesting to compare the Java: How to Program disparities for the 5th and 6th editions; this is a commonly used textbook. Some people like it, but I’m not one of them. In this case, I would attribute the high price of a used 6th edition to the fact that it is likely still a current textbook; the low used price of the 5th edition to the fact that, now that it is not a current textbook, nobody values it very highly. A couple other books on the “High Price Disparity” list also show signs of old textbook syndrome; if the “new” price of a computer book is over $70, a warning light should go off: this fairly screams “THIS IS A COLLEGE TEXTBOOK!” Unfortunately, that also means, in most cases, that it’s a crappy book. Why do professors choose lousy books for textbooks? I have no idea. The paranoiac in me suspects that someone is getting a kickback, somewhere.
As an aside, my favorite Java book, Khalid Mughal’s Programmers Guide to Java Certification, remains highly valued even in used editions. I heartily endorse this book, even if you don’t plan to take a Java certification test ever… you will understand Java better after reading it. It’s exponentially better that the Dietel books.
Conclusion? You can learn something about the actual value that the consumer places on a book by looking at what it’s worth as a “used” commodity. Unfortunately, other factors (age of the book, whether it’s a textbook, etc) may influence the price disparity, so you can’t necessarily assume that because a used book is highly priced that it is good, or that because it has a low price that it is inferior.
You can probably make a pretty good guess, though.
I was going to include links to the amazon page for each of the listed books, but I decided that since they are so easy to search for on Amazon (if you care to), that this would be inefficient use of time. That is, I chose to be lazy.
