The Economics of SAT Cheating

By Andy Gold

What do you say to your child who has just asked you to pay $3000 for someone else to stand-in and take the SAT exam on their behalf?  The recent SAT cheating scandal in an affluent suburb of New York City, sheds light on one subdivision of the rapidly growing cheating culture that has accelerated in recent decades. What remains both clear and unfortunate is that from an economic vantage point, some young people continue to feel that the benefits of cheating are equal to or greater than the costs  (Anderson, 2011, McCabe, 2009).  As it turns out, the reason the students involved in the recent case were caught was not that someone noticed a fake ID, but that the SAT scores for that cheating student were disproportionately higher than their overall GPA, and this raised a red flag (CBS news).

Cheating behavior is not limited to the field of education alone and this problem appears to be more widespread than people realize. Its impact is being felt in many dimensions of society. Insider trading scandals, performance-enhancing drugs in sports, office supply theft, accounting fraud, Ponzi schemes, conflict of interest in the medical profession and journalism scandals like the New York Times reporter Jayson Blair who fabricated stories. It is no wonder that this is where we find ourselves when we hear stories that appear to support research which demonstrates that a nexus is present between cheating behavior in high school and college, and this behavior carrying forward with these individuals into the professional workplace. Applebome (2011) reported about a student that was caught up in this scandal and recently arrested. It is alleged that this student accepted payment to take the ACT exam for someone else. He scored a 31 out of 36 and received $3,600. Where was this student when he was arrested? A senior at Tulane University majoring in business.

It is clear that the scheme that is currently in place to deal with and mitigate these incidents do not seem to be very effective.  Can economics provide additional insight into this issue, and can anything be done to fix the problem?  The recent scandal provides additional data which allows one to begin analyzing the economic question of how much a perfect SAT score is worth. In other words what is the market price for this service?  A perfect score on the SAT exam can be achieved in one of five ways. A student may have innate ability, work hard and self-study, pay for supplemental tutoring and preparation services, have a lucky day, or pay someone else to take the test on their behalf. None of the five options outlined insure a perfect score.

One might ask why a person may cheat even when they are able to afford paying a tutor or taking test-prep courses to increase their score. Tutors and test prep courses are not cheap. Highly qualified SAT tutors can cost $75-$750 per hour or more. Six years ago, in a 2005 Bloomberg article entitled “If Parents Fret, Do SAT Tutors Cost $685/Hour?, Cole (2005) explained “College-admissions anxiety is driving more parents and students into the arms of SAT coaches. University officials and high school counselors frown on the practice, saying it is overpriced and unnecessary. Yet demand is pushing up prices as globetrotting tutors command as much as $685 an hour”. The forces of relativity are strong. In many instances, our happiness is not measured by how much we have, or what college we get into, but rather how much we have and what college we get into as compared to those around us. In addition to the peer forces of relativity, the recent economic downturn has added to the SAT pressure in that students know high SAT scores can lead to scholarship opportunities.

Students may need 20 hours or more of tutoring ($1,500=$3,000) to prepare for the exam and tutoring is no guarantee of a high score on the actual test. Also, time scarcity has placed an increased emphasis on cheating behavior. In general, people feel like time has become increasingly scarce and the need has arisen to take shortcuts in order to complete certain tasks. Scoring well on the SAT exam appears to be no exception. In researching this question, it seems that the mean price paid for having someone else illegally take the SAT/ACT exam on your behalf is $2,352. In my internet research, the amount paid for such services ranged from $500-$4,000. On the surface, this amount may seem reasonable to some, out of financial reach to others and crazy to even consider by most. However, with the cost of legitimate tutoring and supplemental services rivaling the cost of paying someone else to take the exam for you, it is no wonder that some people opt for the easier option.

It is important to acknowledge that this issue concerns a narrow group of students and most students do not engage in such activity. The recent investigation on Long Island, NY has widened to more than 35 people from five schools, two public and three private. Nassau County officials had previously indicated that they were investigating three other schools and at least one other suspected test-taker (Anderson, 2011). In discussing the recent cheating scandal, Anderson (2011) reported that “at the hearing, representatives of the Educational Testing Service said that about 3,000 test scores were examined for irregularities each year — out of more than two million exams taken — and that of those, 1,000 were canceled, most after test-center supervisors reported irregularities, or because of large jumps from scores on previous tests. Suspected impersonations constituted about 150 of those canceled scores. About 700 people were turned away for questionable identification at test sites”.

Using this data, we can come up with a potential market size for SAT cheating. On the low-end multiplying 850 by $2,352, you come up with a two million dollar market. What economic effect has the recent scandal had on supply and demand for this service? For sure, one can imagine that in light of the recent disgrace and arrest of one of the test takers on Long Island, two economic developments have come to light. First is that the punishment for getting caught  paying someone to take the test are significantly less than the consequences of accepting and taking the test on someone’s behalf.  Dolmetsch (2011), a writer for Bloomberg Newsweek explained, “students who paid others to take the test were arrested today and face misdemeanor charges…whereas the student who took the test is being charged with first degree scheming to defraud, second-degree falsifying business and second-degree criminal impersonation and face as much as four years in prison if convicted”.

As a result, it is possible that the worst case scenario has unfolded within this market. If they didn’t already know, it is now clear that a test taker potentially faces jail time, whereas the student paying for such services faces a rather insignificant consequence if caught. Therefore, it is reasonable to infer that the supply of willing test takers has diminished (supply has shifted to the left) and the demand for such services has remained the same or increased (shift to the right). Students, who didn’t know about this option, now do and those that were concerned about paying someone may now realize that the probabilities of getting caught are low and the punishment is minimal. Depending on how much supply and demand has shifted will determine what the new market price is. If for example, demand for paying a person to take the SAT has increased  more significantly than the reduction in the supply of test takers, then not only will the quantity demanded be greater, but so will the cost of the service. If, on the other hand the shift in willing suppliers providing this service has decreased more than the demand increased, the price will be higher, but the quantity demanded will be less. While not a positive development, the economics of supply and demand for the market of paying someone to take the SAT exam seems to be well-formed and functioning.

What about the majority of students who are honest or economically disadvantaged and cannot afford supplemental tutoring and preparation? This troubling consequence underscores how uneven the playing field can be, particularly within the education sector.  Research has documented that one of the core drivers behind the widening income gap is a lack of educational opportunities and resources available to those young students most in need.  Here, we see an additional problem whereby a group of young people with economical means, involved in unethical and illegal activity potentially taking an opportunity away from a deserving student that has tried her/his best.

I am not suggesting that an economically underprivileged student who is high achieving on their own merit will be crowded out of an opportunity to go to college. However, they may miss out on a chance to go to a specific college because of the cheating behavior of others, and as a consequence miss out on opportunities that may exist at that university. Most top-tier schools have unspoken quotas of numbers of students that they will accept from a particular high school. A deserving student can potentially be excluded from consideration because of the cheating behavior of others.

With the reforms made to the education system in recent decades, “never before have so many had so much reason to cheat. Students’ scores are now used to determine whether teachers and principals are good or bad, whether teachers should get a bonus or be fired, whether a school is a success or failure” (Winerip, 2011). In his book entitled “The Cheating Culture”, David Callanan documents in great detail the prevalence of unethical behavior, and what some of the key drivers are that contribute to it. Callanan added “A common assumption about academic dishonesty is that it’s the marginal students who mostly cheat. But research has found that cheating is also common among top students, and the reasons are obvious enough: Highly competitive students are extremely focused on success and worried about their grades — even tracking their GPA down to the fourth decimal point. Some of these students will do anything to bolster their performance, including cheat” (Callanan, 2011).

The factors that have cultivated the cheating culture within education have started to have a more systemic impact. Pressures to perform and achieve unrealistic goals in high school, spillover into college and ultimately individuals take this learned behavior into the workplace. This process helps to explain in part the flurry of ethics scandals that have evolved in the professional domain in recent decades.

It seems like we are fast approaching a tipping point where it will be extremely difficult to remedy this problem within our educational system. Clearly, a new approach is in order. One that provides an incentive system that fosters an environment of learning for the sake of adding value to society as opposed to the current system which fosters unrealistic outcomes that harm society. Is it time to say goodbye to the SAT?


Anderson, J. (2011). SAT cheating inquiry. New York Times. Retrieved from

Applebome, P. & Anderson, J. (2011). Exam cheating on Long Island hardly a secret. New York Times. Retrieved from

Cole, (2005). If Parents Fret, Do SAT Tutors Cost $685/Hour? Bloomberg Retrieved from

Callanan, D. (2011). The cheating culture web site. Retrieved from

CBS news.

DolmetschC. (2011). More Long Island students charged in test cheating scandal. Bloomberg Newsweek online. Retrieved from 

McCabe, D. L., & Bowers, W. J. (2009). The relationship between student cheating and college fraternity or sorority membership.4), 573-586. Retrieved from

SAT and ACT cheats face no penalty.

Winerip, M. (2011). PA. joins states facing a school cheating scandal. New York Times. Retrieved from

2 thoughts on “The Economics of SAT Cheating

  1. What a great article!
    The SAT exam is by no means the best tool to measure a student’s potential, and should not be among the deciding factors of whether the student gets into a school or not. There needs to be a more dynamic approach that ensures fairness so that all students (rich, poor, minorities, etc) can have a shot in today’s competitive world.

  2. […] Standards for Arsenic in Juice MF Global, Meet Enron. Enron, MF Global Why Kids Cheat on the SAT: an academic study & a Forbes […]

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