Price Discrimination in The Princeton Review’s Online SAT Tutoring Service

Prices for online tutoring services from The Princeton Review differ based on the consumer’s geographical location in the United States. After capturing the prices given for each of 32,989 5-digit ZIP codes in the United States, we found 3 different prices for the same online tutoring package: $2,760 or $115 per hour (in 24,492 ZIPs or 74.2 percent of the ZIP codes), $3,000 or $125 per hour (in 5,971 ZIPs or 18.1 percent) and $3,240 or $135 per hour (in 2,526 ZIPs or 7.66 percent). ZIP codes receiving the higher prices were in the Northeast and parts of New York. Bands of the middle prices appeared in parts of California, Texas, and the Midwest. It is understandable that tutoring companies have different prices across different geographic locations for in-person tutoring, as tutoring quality and labor costs can differ across geographical regions. Online tutoring, however, should theoretically be priced consistently because it draws from the same group of tutors, regardless of the geographic location of the consumer.

We appeared on a Today show segment with Ronan Farrow, and our findings were also featured in a ProPublica article.

K. Vafa, C. Haigh, A. Leung, N. Yonack. Price Discrimination in The Princeton Review’s Online SAT Tutoring Service. Journal of Technology Sciences. September 2015.