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Journal of Technology Science | 09.01.15

Unintended Consequences of Geographic Targeting

Jeff Larson, Surya Mattu, Julia Angwin

Abstract

For decades, The Princeton Review has prepared students for a battery of standardized tests for a price. In some cases, that price varies by ZIP code (or United States postal codes). The Princeton Review’s website requests users enter their ZIP code before receiving a price for the individualized tutoring service. We at ProPublica analyzed the price variations for an online SAT tutoring service offered by The Princeton Review. The Princeton Review told ProPublica that the regional pricing differences for its “online tutoring package” were based on the “differential costs of running our business and the competitive attributes of the given market” and that any “differences in impact” were “incidental.”

Results summary: We collected the price for The Princeton Review’s “24-hr Online Tutoring,” packages from each U.S. ZIP code and found that the prices varied by as much as $1,800. We compared the price in each ZIP code to the demographics and income of the ZIP code. Our analysis showed that Asians were disproportionately represented in ZIP codes that were quoted a higher price. As a result, Asians were 1.8 times as likely to be quoted a higher price than non-Asians. Our analysis also showed an increased likelihood of being quoted a higher price for ZIP codes with high median incomes.

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