Date of Award

2008

Document Type

Thesis

Degree Name

Bachelor of Arts

Department

Economics Business

First Advisor

Dr. Robert Schmidt

Second Advisor

Dr. Jason Owen

Abstract

Studies have been conducted examining the impact of commodity bundling on company profits and the premium prices charged for these bundles. With recent news of the skyrocketing costs of higher education, it is critical to highlight the specific effects of commodity bundling on the prices of textbooks. A study performed by the Government Accountability Office in 2005 cited that a main cause of increasing textbook prices is the recent inclusion of textbook supplements such as software and workbooks. This paper investigates the impact that different types of supplements have on the overall price paid for the bundle. Aggregate sales data of psychology textbooks, including characteristics such as average new and used prices, edition year, and book quality are utilized in my analysis. By way of an ordinary least squares regression utilizing fixed effects I will estimate the price differentials of college textbooks containing supplements as well as identify bundling trends within the industry. When viewed in conjunction with studies of how students value these ancillary materials, conclusions can be drawn on the comprehensive utility of these bundles.

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