Unexpectedly Intriguing!
20 July 2009

Mankiw: Principles of Economics, 5th Edition, AmazonIn 1994, Harvard professor Greg Mankiw stunned the textbook publishing world by scoring a $1.4 million advance to write his Principles of Economics textbook. The textbook, now in its fifth edition, is now available for sale through Amazon.com at prices ranging from $114.98 (used) to $123.85 (new) to $158.73 (new from Amazon), the latter price representing a 25% discount from the book's hefty $210.95 list price.

We wondered just how many textbooks would it take, at today's Amazon sale price, for Mankiw to make the same amount of money today.

The key to this puzzle was provided by the National Association of College Stores, which provided the crucial information that textbook authors receive, on average, 11.7 cents of every dollar college students spend on textbooks.

NACS Where Textbook Dollar Goes Let's say that this percentage is exactly what Mankiw sees from each sale of his "Number 1 best-selling economics textbook". At a price of $158.73, that would mean that Mankiw personally pockets $18.57 for each textbook sold. [Note to students: It's unlikely that you could get a discount on the text by sending this portion of the money for the textbook directly to Mankiw. Or a better grade....]

Now for the big numbers! To justify an advance of $1.4 million dollars with today's prices, that would mean that college students would need to purchase over 75,390 new copies of the text over the publishing life of each edition. For the sake of comparison, in 1998, sales of 50,000 would represent the typical point of breaking even for textbook publishers under normal circumstances.

There's no question then that sales of Mankiw's Principles of Economics then are much higher than these figures, otherwise the publisher would not consider creating new editions. Consequently, while the total sales volume exceeds this figure, look for Mankiw to continue churning out slightly modified new editions of his text.

Which in turn explains the title of James Yu's post at IvyGate: Prof. Releases New Textbook, Poor Students Cower in Fear!


About Political Calculations

Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:

ironman at politicalcalculations.com

Thanks in advance!

Recent Posts

Stock Charts and News

Most Popular Posts
Quick Index

Site Data

This site is primarily powered by:

This page is powered by Blogger. Isn't yours?

CSS Validation

Valid CSS!

RSS Site Feed

AddThis Feed Button


The tools on this site are built using JavaScript. If you would like to learn more, one of the best free resources on the web is available at W3Schools.com.

Other Cool Resources

Blog Roll

Market Links

Useful Election Data
Charities We Support
Shopping Guides
Recommended Reading
Recently Shopped

Seeking Alpha Certified

Legal Disclaimer

Materials on this website are published by Political Calculations to provide visitors with free information and insights regarding the incentives created by the laws and policies described. However, this website is not designed for the purpose of providing legal, medical or financial advice to individuals. Visitors should not rely upon information on this website as a substitute for personal legal, medical or financial advice. While we make every effort to provide accurate website information, laws can change and inaccuracies happen despite our best efforts. If you have an individual problem, you should seek advice from a licensed professional in your state, i.e., by a competent authority with specialized knowledge who can apply it to the particular circumstances of your case.