When Asian-American families want to send their kids to the top colleges, many seek an edge by looking for the best SAT prep services available for their children. But at one popular service, some families may not always get the best price, and could pay nearly twice as much.
An analysis of The Princeton Review’s online SAT tutoring packages shows that Asian Americans will pay nearly double the price offered to non-Asians, according to new report by the non-profit journalism organization, ProPublica.
“I was really surprised to see the Asian effect was so strong,” reporter Julia Angwin told NBC News.
Angwin, formerly with the Wall Street Journal, has exposed online price differentials before in a report on office retailer Staples, and their impact on low-income consumers. This time, Angwin looked at the geographic pricing model of The Princeton Review, entered zip codes on its site, and compared it with Census data to see how some people were being treated differently from others.
“I don’t think anyone is intending to be racist… but we have systems in place that end up having this kind of impact.”
“You can see there’s a correlation coefficient that was really strong for Asians,” Angwin said. “It was (also) really strong for people with a high median income. You expect it for income, but we didn’t expect it for Asians.”
Angwin found that while Asians make up 4.9 percent of the U.S. population overall, they made up for more than 8 percent of the population in areas where The Princeton Review charges higher prices for its SAT prep packages.
Even in lower income neighborhoods, Asians were found to be charged the highest prices for The Princeton Review’s services. ProPublica cited the Queens neighborhood of Flushing where Asians make up 70.5 percent of the population. Despite being in a modest income area, Asians were still quoted the highest prices by The Princeton Review online.
But a spokesman for The Princeton Review told NBC News that the ProPublica report was based on flawed data. He said the high prices were fair, and largely due to Asians living in high cost of living markets like New York. Any suggestion that there was a different price for different ethnic groups was “inaccurate.”
In an official statement, the company explained it had four different prices based solely on large geographical market areas, and not determined by an algorithm.
For the premier service package which includes one-on-one tutoring, ranges from a high of $8,400 to a low of $6,600.
“No region is a perfect cross-section of the rest of the country, and the areas that experience higher prices will also have a disproportionately higher population of members of the financial services industry, people who tend to vote Democratic, journalists and any other group that is more heavily concentrated in areas like New York City than in the rest of the country at large,” the statement noted. “But to equate the incidental differences in impact that occur from this type of geographic based pricing that pervades all American commerce with discrimination misconstrues both the literal, legal and moral meaning of the word.”
Angwin acknowledged there is nothing illegal about The Princeton Review’s pricing model if the harm is unintentional. But she said just last year, the courts were still debating the legal doctrine of “disparate impact” which now prohibits unintended racial discrimination in housing and employment.
It just doesn’t apply to online pricing, where any harm can be dismissed as “incidental.”
“There’s probably all sorts of other incidental pricing schemes that we haven’t been able to analyze that contribute to some of the entrenched racism in our society,” Angwin said. “I don’t think anyone is intending to be racist… but we have systems in place that end up having this kind of impact.”
Angwin said the data gives consumers a little more transparency and should encourage families, especially Asian Americans, to shop around and negotiate when they seek testing services.
In one of America’s most Asian cities, San Francisco -- where the Census put the 2013 Asian population at more than 34 percent -- the geographic pricing for The Princeton Review was the same throughout the city, charging the company’s second-highest rate of $7,200. ProPublica found that in Asian America’s most dominant state, California, only zip codes in San Diego were charged the lowest price.
Christopher Chow, director of the non-profit Eureka! Education Center, which provides after school tutoring and SAT prep services in San Francisco, said he did not know of any parents who used The Princeton Review.
But when told about The Princeton Review pricing model, Chow became angry. “Don't use them,” Chow told NBC News. “Find or create alternatives; They do not have a monopoly."