The Cost of Economics Tuition

Readers Question: To pay you to teach me Economics through Cherwell Tutors will cost me about £45. If I instead advertise in the tutorial section at Daily Information I can probably get you (or equivalent) at £18.

Is this an example of market failure?

Well maybe £25 an hour.

It’s an interesting question.

There are various advantages for arranging tutorials through a well established college.

• Time costs of arranging tutorials.
• For more than one subject private reaching would be split up into different locations, increasing transport costs and time inconvenience.

However, for the one off lesson there are certain advantages of arranging a lesson privately. Primarily, the cost is roughly half. If there is a clear financial benefit why doesn’t it occur more often?

• Poor information. I could advertise at Daily Info, but I  don’t have much incentive. The extra income is fairly low and there is the inconvenience of having to advertise and teach at home.
• The main problem is that the market is too small and sporadic. There would be greater demand before exams, but, generally throughout the year demand would be too small to make it worthwhile a) tutor’s advertising b) prospective student searching Daily Info.
• However, some tutors do advertise on Daily Info, so presumably there is a market for those who want to try. However, I would say the advantages of privately arranged lessons are greater for the buyer than the seller. Maybe tutors should charge a higher rate £30. At £30 there is a greater incentive to spend time marketing your services. But, would a £15 saving mean buyers would prefer to goto established colleges.

Is It Market Failure?

Not really, but there is a certain lack of information. Maybe an internet database could keep details of tutors services and this could make it easier to arrange tutorials. This would help overcome the limited information market failure.