THE BIZOP NEWS

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Steven Pearlstein, writing in the Washington Post, has an interesting story about Aplia and textbooks.

When I was teaching, it annoyed me that a) I required the entire class to buy a text book that 80% only want to rent, and b) the other 20% overpaid for information that was never updated.

Pearlstein thinks that Aplia may solve this problem.

"Aplia also paves the way for the textbook industry to ditch a lousy business model in which it has to charge ridiculously high prices for new books because it cannot collect anything from the students who buy them on the used-book market.

Instead, publishers could move to a more sustainable model in which the textbook is priced close to the cost of printing and shipping (say, $20), while all students are charged a reasonable fee (say, $60) for what really matters, which is the content of the textbook, the labs and homework exercises.

Other industries already use this model -- think hardware and software, or razors and razor blades.

The real revolution, of course, will come when Aplia or some other software company comes up with standardized tests that can measure student achievement at the end of the term in a way that not only helps the professor determine student grades, but also allows the university to compare the effectiveness of teachers and allows students, parents and taxpayers to see the relative effectiveness of entire universities.

Under the current system, teachers are assessed by how popular they are with students, while universities are assessed by how well students perform on tests and what kind of research faculty produce.

"What we have right now is a reputational model for universities rather than an outcome model," Romer says. "The presidents at the elite institutions know that if the competition were to be based on some credible measure of output or value added, they would lose."

Paul Romer is probably right, I have been largely convinced of this point by Robin Hanson.

But, our real problem is with our reliance on rankings as measures.  Most of us in measure theory know that ordinal rankings, from first to last, demand a great deal from the individual in terms of forethought.

The idea that there is a single best is just a terrible idea, and we would do well to jettison not only the idea but all the winner take all market philosophy that is attached with it.