Kurt Mitman | What they don’t teach you in Econ 1

Sorry to be Kurt | Breaking down the market for economics tutoring

· September 13, 2012, 12:39 am

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Kurt Mitman
Sorry to be Kurt

During any given semester, more than a tenth of the undergraduate population is enrolled in an economics course. The department boasts the largest major in the College and teaches a required course for Wharton students.

Inevitably, some students will be more successful than others at grasping the subject and a significant number of those who struggle seek tutoring. The cost and quality of tutoring services can vary greatly.

Many people believe that the playing field is leveled once students get to college, but in reality, inequality persists.

The University offers free private tutoring through The Tutoring Center. While students can only receive an hour of tutoring per week, it offers a satisfactory service.

Despite the fact that this free service exists, there is a thriving market for graduate students in economics (including myself) to act as paid tutors.

“A number of students approached me for tutoring because they felt more confused after the free tutoring,” said Garth Baughman, a third-year graduate student in the Economics Department, who tutors regularly.

Students who choose to seek out private tutoring have several options. The Economics Department provides a list of graduate student tutors, and in upper-level courses, a student’s TA can make recommendations. The cost varies greatly — an informal survey of tutors reveals that prices charged per hour vary from $45 to $150.

So, what accounts for that disparity?

“The first thing I do when someone contacts me for tutoring is look up the student on Facebook,” a male doctoral candidate in economics who wishes to remain anonymous said. “If the student went to, say, Phillips Exeter, or is from Greenwich, Conn., I’m going to charge him a much higher price than if he’s from Brainerd, Minn.”

A word of advice: you may want to adjust the privacy settings on your Facebook account before trying to find a tutor, though the information is still probably discoverable with a simple Google search.

Also, it’s probably a good idea for you to contact the tutor yourself. “If it’s the student’s mother who has contacted me, the price I charge will be significantly higher,” Baughman said.

Then again, if you’re getting your mom to contact the tutor for you, maybe you don’t care about the price he’s going to charge. Further, graduate students are well aware of when midterms and finals occur, so expect price changes accordingly.

So why do tutors set such different prices? Given the limited supply of graduate students, they have market power and essentially form an oligopoly. As you may have (or will) learn in Economics 001, they would like to behave like perfectly price-discriminating monopolists — setting a different price for each individual, charging exactly the maximum amount the tutee is willing to pay. The tactics described by the tutors above are their efforts to find that point. Knowing that a student is affluent or is desperate to cram before a midterm is generally going to result in a higher quoted rate.

So how does this relate to inequality? If debt-ridden students pay less and affluent ones pay more, that sounds like a win-win for everyone (except the rich kids’ parents).

However, tutors never charge less than the value of their time. This means that invariably, some people will be priced out of the market. Economists generally considers that outcome efficient, but it may run counter to Penn’s goal.

Perhaps Penn could do more by adding teaching assistantships for graduate students to serve as tutors for students receiving financial aid. This would help ensure that low-income students who are given a chance to attend Penn have the same opportunities to succeed.

Penn’s generous financial aid helps ensure that the nation’s brightest students can come here regardless of their parents’ income. But if those students struggle, they may not be able to afford the same quality of help that affluent students can.

Rather than succumbing to pressures to achieve economic efficiency, Penn should strive to level the playing field even after students have matriculated.

Kurt Mitman is a 6th-year doctoral student from McLean, Va. His email address is kurt.mitman@gmail.com. Follow him @SorryToBeKurt. “Sorry To Be Kurt” appears every other Thursday.

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