COVID has transformed many aspects of the world to the point that the terms “pre-COVID world” and “post-COVID world” were coined. It is no surprise that almost all of the markets for the products and services in society were affected by the pandemic in one way or the other. Today, I would like to focus on one specific one: the private tutoring market.
Let’s look at the basic Supply-Demand model. With COVID, both supply and demand increased. The shift to the virtual world, along with significant advancements in online conference technology, has significantly lowered the barrier to entry for tutors, as classes can occur anywhere, anytime. I can personally testify to this as I am also currently participating in this market as a supplier. There is no need for tutors to spend hours and pay for transportations to get to their student’s houses or buy physical books, which are often more expensive than pdfs and ebooks that are used now. Hence, many suppliers of private tutoring are finding it easier to enter the market or increase the quantity of their services by doing more tutoring.
On the demand side, the increase is more significant. The overall employment decreased during the pandemic, bringing income down with it, so one might assume that the money a household can spend for tutoring would also decrease. Since tutoring is a normal good, the demand for private tutoring may have fallen in certain aspects. However, when considering the market for high-skilled tutorings, the overall demand has risen despite this fall in income, mostly due to the consumer’s expectations.
The pandemic lasted much longer than anyone had expected, which means that students are not able to go to school and receive the “normal” education that they used to have. At the same time, many students are struggling to keep up with schoolwork online without the personal attention that only in-person classes can offer. Parents of these students are finding the need to employ other tools to help their children keep up with schoolwork. Private tutoring is an attractive option, as the services offered are specifically catered to the needs of each individual student. Especially in international schools with affluent parents, online classes may indicate more time for private tutorings. Those who prioritize education over all others (and many parents in fact do) increased the portion of their income dedicated to education in order to afford more private tutorings. Hence, despite the fall in income, the demand for private tutorings increased dramatically.
With these changes, the market equilibrium price and quantity for private tutorings changed. Equilibrium quantity increased for sure; that is, there are more private tutorings offered all around the world as more people are willing to tutor and more are willing to get tutored. Without further information, it is not possible to exactly determine the change in equilibrium price, but we can easily assume that it increased. The magnitude of increase in demand is significantly higher than that of supply. Buyers of private tutorings, the students who want to get tutored, usually don’t face a significant barrier. However, tutors do, as one needs to be knowledgeable in a subject to teach it. Hence, the change in the demand would have been larger, shifting the equilibrium price up.
So now, what are the implications of this? First of all, with more private tutorings offered and taken, the gap between students who can afford them and those who cannot is widening. Affluent students can receive personalized education from talented tutors to supplement their learning, whereas others would have to rely on online classes provided by public education, which may not be the best option for their learning. There is less importance endowed to online classes in school, as students review the same material with their private tutors, who provide catered education to each student. There are much more impacts brought upon by the change, but such is another matter of debate. Let us know what you think about this or if there are any other significant changes you have noticed under the pandemic.
Food for thought:
https://www.reportlinker.com/p0552740/Private-Tutoring-Industry.html?utm_source=GNW