Category Archives: Journal 1

Rationality: Starbucks vs Dunkin’ Donuts

What’s your daily brew for the morning?

Is it: Instant coffee like Maxwell House or Nescafe? Home brew made from your Keurig? Or for those who appreciate the finer things in life, a cup of joe served with a smile from your local Starbucks barista, Dunkin Donuts employee, McDonald’s team member, or Subway sandwich artist?

As a frugal consumer, it really puzzles me when I see somebody spending $1.96 for a grande coffee from Starbucks when they could get a similar quality medium coffee for $1.69 from Dunkin Donuts.

Is it possible for a good, in this case Starbucks, be overpriced? Is buying a coffee at that price rational? If it’s not, why do we pay it?

starbucks vs dunkin donuts
Click here for original.

To answer those questions, we must know how supply and demand influence price, and how to define rational behavior.

Supply and Demand

Traditional economists define the law of supply and demand as “the effect the availability of a particular product and desire for that product has on price.” Essentially, low supply and high demand cause an increase in price, while a high supply and low demand leads to a fall in price. The price and quantity at which supply equals demand is the equilibrium point. On a supply and demand graph, supply is an upward sloping line because an increase in price (paid by consumers) cause an increase in quantity supplied. Demand is a downward sloping line because an increase in price (charged by suppliers) results in a decrease in quantity demanded.

equilibrium
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There are many factors that affect supply and demand and they are called supply/demand determinants. Supply determinants include cost of factors of production, technology, prices/profits of other goods, seller’s expectations, and number of sellers. Demand determinants include buyer’s income, buyer’s preferences/consumer taste, buyer’s expectation, price of other goods, and number of buyers.

Now that we understand the basics of how the equilibrium price is determined by supply and demand, we can answer the question: can a good be overpriced?

An overpriced good would have a price of P1 on following supply and demand graph. It has increased from the equilibrium price (P*) and the quantity demanded and supplied would have changed to Q1 and Q2 respectively.

surplus
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This graph indicates a surplus of Q2-Q1. Suppliers are producing more goods than consumers are willing to purchase at the increased market price. This overpriced good is inefficient for the economy, and this price cannot be sustained for a long period of time (by suppliers). As a result, producers will reduce the price and cut back on production to meet the demands of the market. Consumers respond to this lowered price by purchasing more. ”In a competitive market, this process continues till the market reaches equilibrium.” 

Therefore, according to these supply and demand models, a good cannot simply be overpriced and the only way to increase the price of a product without affecting the market equilibrium is by increasing demand or decreasing supply. This is often accomplished by changing consumer tastes and preferences to increase demand.

demand shift
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Rational Behavior

Investopedia defines rational behavior as: “making choices that result in the most optimal level of benefit or utility for the individual. Most conventional economic theories are created and used under the assumption all individuals taking part in an action/activity are behaving rationally. Rational behavior does not necessarily always involve receiving the most monetary or material benefit because the satisfaction received could be purely emotional.” By this definition, purchasing a coffee from Starbucks for $100 can be rational as long as the consumer values the benefits of that coffee more than $100.

However, it goes beyond that simple conclusion. To determine if a decision is rational, you often have to remove any emotional factors and base your evaluation on only the available facts. An irrational decision is one that lacks rationality, or is less logical than more rational options. 


Bounded Rationality

To dive deeper, I would like to discuss how human rationality is bounded (imperfect, and sometimes even irrational), and how our daily decisions are easily and often influenced. So sit back with your favorite cup of joe and enjoy the show.

According to BusinessDictionary.com, bounded rationality states that all decisions are made under three unavoidable limitations: 

  1. There is often “limited and often unreliable information” regarding all the options and their consequences.
  2. The human mind is limited and may not be able to process all available information.
  3. There is a limited amount of time to make the decision.

As a result of these restrictions, most, if not all rational choices regarding complex decisions, are satisfactory, and not optimized. This concept, introduced by Herbert Simon is called “satisficing” (satisfy+suffice).   

satisficing
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Regardless, even if we were able to gather all the available information regarding the pros, cons, alternatives, and consequences of buying a coffee from Starbucks, our brains would not be able to process it all and it shouldn’t have to. Thankfully, we learn from a summary of Thinking, Fast and Slow by Daniel Kahneman on BrandGenetics.com that there are two types of thinking:

  1. Intuitive thinking
  2. Rational thinking

Although rational thinking is “slow, deliberate and systematic” and is extremely limited, intuitive thinking is “fast, automatic and emotional”. A simple economic decision like choosing where to buy a coffee is easily made using intuitive thinking.

However, intuitive thinking is based on heuristics and biases. Today we will be focused on heuristics. To read more about biases affecting intuitive thinking, please click here

Heuristics

So if you decide to go to Starbucks because it feels like the right decision, you’ve been influenced by the affect heuristic (if a decision feels good, it’s the right decision). If you choose to revisit Starbucks because you can easily recall your last visit to Starbucks, but can’t remember the last time you had Dunkin Donuts, you were influenced by the availability heuristic (things we easily remember are more important than things we can’t). If you step halfway into a Starbucks to try a free sample, look at the menu and realize how expensive the drinks are compared to Dunkin Donuts, but still choose to buy a coffee from the green-aproned barista, you’ve been persuaded by the commitment heuristic (if you’ve already invested in a decision, you should see it through).

These are just some examples of heuristics that can greatly sway your decision. However, there is one extremely common heuristic used by businesses and by (behavioral) economists to argue that humans aren’t always rational decision makers. It’s the anchoring effect/heuristic. Anchoring is defined as “the use of irrelevant information as a reference for evaluating or estimating some unknown value or information” by Investopedia

Therefore, “the first impression matters”, and with coffee, there are many outlets for people to develop an anchor for coffee. Compared to outlets like Dunkin Donuts, McDonalds, and convenience stores, Starbucks is simply charging more for a similar product. Nonetheless, there is still a huge demand for frappucinos and macchiatos, and the company continues to succeed. Since going public in 1992, their stock has increased over 16000%, beating the S&P 486% return in the same time period.

So how did the twin-tailed mermaid attract so many customers (aside from her elegant flippers)? By opening stores that had a different ambiance, different food offerings, different store appearance, and even different drink sizes, Starbucks was able to disassociate themselves from price anchors set by other coffee-selling chains. Furthermore, “repeated visits to Starbucks served to establish a NEW anchor price for high-end coffee products. Each purchase of $4 coffee strengthened that new anchor  point.” 

Compared to large coffee that costs $1.89 at Dunkin Donuts, a Starbucks venti coffee that costs $2.07 might seem overpriced. However, compared to the $4.95 grande pumpkin spice latte, that once overpriced drink is a great deal!


 

There are a couple more economic/marketing concepts used to influence consumer decisions. They are the framing effect and psychological pricing.

Framing Effect

The Framing Effect states that how information is presented influences consumer choices. For example, 10% customer dissatisfaction sounds much worse than 90% customer satisfaction, and a gym membership that costs $1.28 per day sounds much more economically sound than $39 a month. Although both phrases mentioned above contain two statements that deliver the same objective information, one sounds subjectively more positive. However, a study conducted by David R. Mandel for the American Psychological Association reveals that “a significant majority of participants made rational decisions by classical rational-choice criteria in traditional risky-choice framing problems.”  

Psychological Pricing

Psychological pricing takes advantage of consumers’ emotional side to encourage sales without significantly reducing prices. There are five types of psychological pricing strategies: 

  1. Charm Pricing: By reducing the leftmost digit by one (usually done by reducing the price by 1 cent, $3 lowered to $2.99), consumers perceive the price as a lower tier than before. According to an experiment by the University of Chicago and MIT, when different women’s clothing items were priced at $34, $39, and $44, the $39 item was the most popular. 
  2. Prestige Pricing: By rounding up prices (i.e. $99 up to $100), the price is more easily processed and “encourage reliance on consumers’ feelings.” The decision is based on feelings rather than cognition.
  3. Buy One, Get One Free: This strategy takes advantage of consumer greed. Logic is “tossed to the wind” and the consumer is most concerned with getting the free item. This strategy is modified to best suit financial/sales goals (buy one, get three free).
  4. Comparative Pricing: Offering two similar products side by side makes one product seem much more attractive (this is a similar concept to anchors). Surprisingly, this best works with luxury items, especially clothes. An expensive tuxedo beside a cheaper one is perceived as higher quality.
  5. Visually highlighting the different prices: Changing the font, size and color of signs that indicate a current sale price will convince customers that this is a cheaper price, and a much better deal.

All of these psychological pricing strategies make consumers FEEL like they’re getting a good deal, and may motivate them to buy something they don’t need, or something more expensive than necessary.


In Conclusion

So to answer the question: Are the prices we pay for goods rational? Can a good be overpriced? I would say that according to the laws of supply and demand and the evidence previously provided, the prices we pay are rational, and that nothing can be overpriced (as seen earlier).

Although humans are not perfectly rational, meaning we don’t always make the MOST objective logical choice, we possess bounded rationality. Despite our limitations, humans process the available information to the best of our ability in the time given to make the decision that provides the most benefit. We satisfice because we have no better option under those circumstances.

Although some behavioral economists would argue that techniques like heuristics, the framing effect, and psychological pricing cause us to make irrational decisions, traditional economists could say that they simply change the consumer’s preferences and tastes, one of the demand determinants, to increase demand.

Visiting Starbucks instead of Dunkin Donuts may seem irrational to some, but to others, it provides them with the most emotional value at the expense of economic value. If the markup was so great that nobody would buy it, Starbucks would be going out of business. Instead they are consistently growing and appealing to those who appreciate the experience, not the coffee or the price.

Journal Prompt #1- Hsin-Yen Liu

What determines a student’s mark? Knowledge? Intelligence? Effort? Sure. But apparently there’s one more thing: money.

In 2011, The Toronto Star published an article revealing the issue of students paying for grades.  Basically, certain private secondary schools, known as “credit mills,” allow students to earn easy and inflated marks for a fee of $500 to $980 per course. Below are some of the findings on credit mills:

  • Grades at some private schools arbitrarily increased upon request
  • Credits granted with less than half of mandatory class hours completed
  • Missing student assessments
  • Teachers without proper qualifications and those who “do not understand” evaluation and assessment
  • Rewriting of tests for $100
  • Students left to write tests with little supervision and access to the Internet.

Most people, I assume, would frown upon the idea of paying to get good marks. If students can exchange paper bills for better marks, then what would become of the meaning of marks? Wouldn’t marks become a measure of wealth, not ability? However, as questionable as this credit-mill business may seem, it exists, and it seems quite successful.

The question is: why?

Incentives and Opportunity Costs
We can use incentives and opportunity costs to explain why private schools are willing to sell “A-credits,” as well as why some students are willing to pay large amounts of money for higher marks.

For the credit mills, it is clear why they want to give easy marks to students: economic incentives (money). By allowing students to get high marks effortlessly, the schools attract desperate students who will pay $500 to $980— as mentioned earlier—for each of the courses that they take. This makes a lucrative business that the schools would definitely not want to miss out on. So basically, for the credit mills— which have nothing to offer (they obviously don’t offer good education if they have unqualified teachers) except easy marks—

Now, how about the students? Why would some students want to obtain their credits from credit mills? Well, we can analyze the opportunity costs— the values of the next best choice.

If the students choose to go to regular schools, their opportunity cost would include the higher marks that they could have gotten from the credit-mills. This could very well translate into getting into the desired university programs and receiving scholarships. Also, perhaps less importantly, the opportunity cost would also include some extra time; if they have gone to the credit-mill schools, they would have gotten their credits with less than half of the mandatory class hours, as well as fewer assessments to spend time worrying about.

On the other hand, if the students choose to buy easy marks, their opportunity cost would include the $500 to $980 that they spend on each of their courses, as well as “proper” education. What do I mean by proper education? Well, education with qualified teachers, enough class hours, and reasonably difficult tests during which the Internet is not allowed —none of which you can find in the description of a credit-mill class. By not receiving proper education, it is obvious that the students do not study or learn as much as they would have in a regular class.

Evidently, for the students who are choosing to get their credits from credit-mills instead of regular high schools, the latter is costlier. That is, they place more value on getting higher marks (and more free time) than on the course fees and a proper high school education. As a result, they choose to sacrifice their money and their high school education so that they don’t miss out on higher marks and free time. Why? Some of them may know/feel that the only way for them to get to into their desired university programs is to pay for the required admission marks. Since getting into the “right” university programs is so important, nothing — not even bad high school education or high financial costs— will stop them from doing whatever they can to ensure their placements in the programs. Or, they might just have “screwed up” very badly in public school, to the point where buying their marks seems to be their only solution.

So here we go. We have private schools that are willing to supply good marks at high prices, and students who are willing to pay those prices to get better marks. This is why the credit-mill industry is successful.

Credit Mills: Good or Bad?
Hmm, so perhaps credit mills are not that bad after all. Some students get the marks that they need, and the credit mills get to pocket large amounts of money. It’s a voluntary trade, and everyone seems happier. However, this is only a superficial observation. If we compare the efficiency and and equity of two school systems—one with and one without credit mills—we will see that credit mills are indeed bad.

Efficiency: one system is more efficient than another if some people are better off and no one is worse off. So, in the short term, it may seem more efficient to have credit mills— some private schools are better off with more money, certain students are happier with paid high marks, and the remaining students are just getting the marks that they normally get. Some people are better off, and the others are not worse off.

However, on the long run, having credit mills is definitely not more efficient. The private schools are still better off with more money, but many of the students are worse off. According to the Toronto Star article, students who pay for grades “are beating out more academically deserving teens for university spots and lucrative scholarships.” This makes the “more academically deserving teens” worse off. In addition, the students who pay for grades will eventually “flunk out because they’re not ready.” So they are worse off too.

In the end, the credit mill industry only benefits the credit mills, and it harms many students. Thus, a system with credit mills is definitely not more efficient. However, this is not to say that a system without credit mills is more efficient, because it makes the private schools worse off.

Equity: According to research fellow Harry Jones from Britain’s Overseas Development Institute, equity means that people are treated as equals, and it concerns three major areas:

1. Equal life chances: There should be no differences in outcomes based on factors for which people cannot be held responsible.
2. Equal concern for people’s needs: Some goods and services are necessities, and should be distributed according solely to the level of need.
3. Meritocracy: Positions in society and rewards should reflect differences in effort and ability, based on fair competition.

It is quite clear from the above criteria that it would be inequitable if students can pay for grades; credit mills create unequal life chances. Students who are born to poorer families are at a disadvantage because of a factor for which they are not responsible— their parents’ income. Also, if one student is getting a better mark than another student because they (or most likely, their parents) have paid for it, clearly that does not reflect “differences in effort and ability,” does it? It would not be a fair competition if students can pay for grades.

On the other hand, if credit mills did not exist, a difference in marks would be a more accurate reflection of the differences in effort and ability. The outcome would be much fairer and much more equitable. So from this perspective, credit mills should definitely not exist.

To sum it up, credit mills do not make a school system more efficient, for even though they benefit the private schools, they make many students worse off. Also, credit mills make the school system a lot less equitable and fair. Seeing as a school system should aim to benefit the students, there is really no reason why credit mills should exist.

Students should not be able to pay for grades.

Solutions?
Now that we have established that credit mills are bad, how can they be eliminated?

Actually, back in 2009, the school ministry attempted to reduce the problem by flagging every private school credit with a “P” on the transcript. They did it in the hopes that universities would disregard the undeserved high marks, and thus lowering the opportunity cost for obtaining credits the regular way (the high marks bought from credit mills will then have little value).  However, many universities, such as Wilfred Laurier University, University of Toronto, and University of Western Ontario, still take the approach of “a grade is a grade is a grade.” The “P” tells nothing about the nature of the marks except that they are earned from private schools, but not all private schools are credit mills. In other words, the extra “P” did nothing to change the opportunity costs for students.

An inexpensive improvement on the existing “P” would be adding the names of the private schools onto the transcripts. This could perhaps give universities a better idea of whether the marks are legitimately earned or not. However, Jennifer Yang, the author in this Toronto Star article, feels rather pessimistic about it; she questions whether universities would take the trouble to create a ranking system for all the private schools.

I believe that the solution lies in getting to the root of the problem—identifying and doing more about the schools that are selling marks. As Yang has mentioned in her article, there should be better inspections: suspicious schools should be inspected more to ensure that they are doing everything properly. And to avoid an increase in spending, schools with good records should be inspected less often.  Also, once identified as being credit mills, private schools should face more consequences. Currently, schools can get their credit-granting authority revoked if is found that they have problems. However, they can re-open as soon as one year after the they are shut down! Clearly, there should be a change in policy to increase this waiting time, so as to discourage schools from doing wrong.

The ministry should add negative economic incentives too: if they fine credit mills large amounts of money for selling grades, then the opportunity costs for doing the business would increase significantly. Not only only would the schools be shut down (for a while), they would also lose the profits that they have earned in the previous year(s). If the fines are large enough, the opportunity costs for selling grades would rise to a level at which credit-mills would find it more desirable and less costly to run their schools properly (to offer real education, not just marks).

A (Not So) Brief Recap
To sum everything up, there exists a problem in our education system where students are able to pay for easy grades by going to certain private schools known as “credit mills.” They pay something in the range of $500 and $980 for each course, and in return they get high marks that require almost no effort.

The credit-mill industry is successful because the private schools want to earn money, and students value high marks. However, being successful doesn’t make it good: not only does it make some students worse off (thereby not making the school system more efficient), it also makes the school system less equitable.

To eliminate credit mills, more inspections should be done so that the problem-schools can be better identified. Also, credit mills should face worse consequences once they are identified. They should have to wait for more than one year before they can re-apply for their licenses, and they should be fined (heavily). With proper incentives, the opportunity cost for selling marks could be increased to a point where it is actually costlier than that of not selling grades.

Paying for grades is a serious problem, but not one that cannot be fixed.

Banking On Your Mark Just Got Easier

Pencils? 1 dollar. Notebook? 50 cents. Calculator? 20 dollars. Getting a high mark in that Economics class? Priceless.

We’ve heard that tag line a million times on various TV stations, but guess what? Getting that high mark in Economics? Not so priceless anymore.

In a recent investigation done by the Toronto Star, shocking facts were unearthed about “credit mills.”

But first, what exactly is the credit mill industry? Most commonly found in private schools, these sneaky school operations allow for kids to pay for higher marks to replace their less-than-stellar grades. Universities today are setting high standards, and kids are using these methods in order to achieve the best mark money can buy.

Findings from the newspaper were as follows:

– Grades at some private schools upgraded upon request.
– Difficult questions removed from the exam.
– Students allowed to write tests with little supervision and internet access.
– Tests could be rewritten for a hundred dollars.

Imagine if regular high schools allowed those things to happen. We would never have to study for tests again! Don’t like that question? Ask the teacher to remove it! Don’t like that grade? Upgrade it! Don’t know the answer to that question? Google it! Sounds unreasonable right? This is exactly what is happening in credit mill high schools. Instead of failing out of classes, under-achieving students are able to pay their way to a better grade.

You would think that a sensible teacher would take a moment to say “Hey guys, this is actually very unfair!”, but either it hasn’t happened, or they have been silenced. Now, okay. I know what you’re thinking – so what if they get higher marks, it doesn’t affect me! You bet it does. Hard-working kids like you and I are being rejected from top university programs (I’m looking at you, Schulich!) simply because students from these credit mills are taking our spots.

Because your marks aren't high enough, that's Y!

Credit mills are bad news, but if that’s the case, why do they still exist? Better yet, why are they so successful?  Here are the reasons why.

1. Economic Incentives

Incentives are used as a way to change the choices that people make. Here in these credit mill cases, the obvious incentive being used are economic incentives. Economic incentives are enticing because it  involves people gaining economically (usually involving money), as long as they change their decisions.

In an example provided by this article, a student received a measly 74 percent in Advanced Functions, and sought out to change it by attending TCT high school – a credit mill. Paying between $500 – $700 dollars for each credit, the student knew what he was getting into. The amounts of money being paid by students were  huge economic incentives for the school to hand out easy marks. The money is what differentiates these credit mill classrooms from regular classrooms.

One of the main reasons why these credit mills are so successful is that it is just so simple to give easy marks. After all, the teachers are gaining from it. So what if they’re not exactly qualified? So what if they’re doing less than the required 110 hours of classroom time? They’re getting paid. The economic gain in these situations are so powerful that there isn’t much to lose from partaking in them.

One teacher offers the explanation that the marks are higher because of “smaller class sizes and more personal attention.” Yeah, right. The only reason these teachers would pay more attention is because of the number of zeroes these kids are throwing away. Students being prepared for university isn’t even close to being one of these high schools’ concerns.

Students on the other hand, should know better. It is pretty obvious what they are getting into by attending one of these schools. Although, for the students, the economic gain is pretty enticing as well. All they have to do is pay a couple hundred dollars and voilà! An easy 90 without any work involved. By parting with their money (or most likely their parents’), students are guaranteed a reasonable amount of economic gain – the desired mark and the university of their choice (Hogwarts not included) . Whether they are ready or not for said university, can still be questioned. Working hard at school could possibly yield the same results, but more often than not, students  feel that it isn’t worth it. These credit mills are an easy way to get what they want without losing much.

I guess Jessie J was wrong, because it's all about the money.

2. Opportunity Cost

Opportunity cost refers to the most highly sacrificed alternative – or the value of the “next best choice”. It is basically what was not chosen.

The opportunity cost for attending these credit mills is a real education. School is a lot more than just getting the required mark. Sure, it would be great to get that 100 in Calculus, but more often than not, it’s about what you learned. Sometimes your mark reflects that, but sometimes it doesn’t. Buying your mark from these credit mills? You may be gaining in the marks department, but you’re surely falling short in the education department.

For those who argue that these are the same things, you’re wrong. Let’s take History for example. The fact is, all they do is memorize and cram the information into their brains for a test/exam. A week later, they probably could not tell you about the Treaty of Versailles. This goes to show that not only cramming is bad, but that you probably didn’t learn much in that class. You may have received a 90+ mark in that class, didn’t learn anything. There is a huge difference between learning and knowing the material for a test. Learn for the sake of learning, not for the sake of getting an easy mark, even if that is an added bonus.

When going to one of these private schools,  you are not learning at all, yet, your mark doesn’t reflect that. The opportunity cost for attending these credit mills are costing students their education, along with the regular cost of their money. Instead of going to a credit mill, students could be learning the material that will prepare them for university. Therefore, one may conclude that the opportunity cost for going to these institutions is an education. Students, however do not realize this. They think that it is an easy way to get high marks, and that is why these credit mills are so successful.

The 3 “E”s 

Equity

To be equitable, it means that everything is fair or impartial – that everyone gets their fair share. An operation is efficient when some people are better off without making others worse off. By paying for grades, one may think that everyone is getting their fair share. Teachers are getting the money, while kids will get the mark they want. This, however is untrue. The students that are paying are actually worse off. They are worse off because they will start to believe that everything in life can be solved with money.  These students also do not work to earn their grades, which in turn means that they do not learn anything. Although it seems great that they are getting high grades, it will ultimately cause problems when they enter university.

Efficiency

The ability of being able to pay for grades is nothing if not efficient (in the short term). As the Dictionary.com definition reads, efficiency means the accomplishment of  or ability to accomplish a job with a minimum expenditure of time and effort. With the proof provided by the Toronto Star, it seems as if running a credit mill requires little to no effort at all! Teachers do not need to provided constant supervision during tests, and the required 110 hours of classroom time isn’t even met at all. The reason that there is no effort at all is because the teachers know that there is no point. Both the educators and students know that the money has already guaranteed a high mark.  The only work you have to do is bring out the money. What’s the point in putting in time and effort, when the results are already set in stone?

In the long run, however, it is not very efficient. Paying for grades would mean that students do not care, and do not put in the effort to get a certain grade. In turn, this makes them unprepared for university. Yes, they do get into their program of choice, but whether or not they can stay in is another matter. Dropping out of university is highly inefficient. You lose time, and also money (due to tuition). Once you drop out, students will probably have to find another way to get back in, to get their desired career. If the students had put in the effort in the first place, they will save a lot of time and money. The chance of those hard working students dropping out of university is far less than those who paid for their grades.

Equality

Now, some of you may say “But they’re paying for it! It’s only fair that they get what they put in!”.  Ladies and gentlemen, let me introduce you to my friend named the Fallacy of Composition. The Fallacy of Composition states that just because something is good for a particular group or individual, doesn’t necessarily mean that it’s good for everyone. Sure, credit mills are fair to those who get what they paid for, but students that work hard to achieve their grades are the losers in this game. They might get a 91 in mathematics, but what good is that compared to a student that got a 97 in a credit mill?  Paying for grades is definitely not an equal system for everyone. Not everyone can afford to pay these high price tags to get a 90+ percentage.  The fact that everyone has an equal opportunity to pay for grades, does not take into account whether or not they have the means to.

What now? 

Universities don’t test the students on what they know, only on what their marks are. This is why the idea of standardized testing should be implemented. Like the SAT in the United States, these will ensure that all the applicants know all the required material before entering post-secondary education. Not only that, it could potentially put these credit mills out of business. Because it’s obvious that these credit mills do not benefit the students academically, no one would pay to get their marks anymore.

Better enforcement could be placed on these private school credit mills. Teachers (unlike in these credit mills) will have to be certified, and have a diploma. Every so often, there should be a government employee sent (preferably undercover) to see what it is like inside the private schools.  Taking them by surprise, there is no way they will be able to “clean up” their act before the auditor arrives. If more schools get caught, other private schools would think twice before following in their footsteps. Additionally, if schools are caught, they should be exposed to the media. Not only does this bring shame to their school, but it will set an example for other schools – kind of like a warning. For example, a 28 year-old Toronto Star journalist went undercover in an alleged high school credit mill, and here’s what her experience was like.

Which leads to my last suggestion. Publicly acknowledging these schools will be a social incentive not to open credit mills. Society will definitely start looking at these schools in a bad light. If exposure to the media is done often enough, people will not want to attend these institutions at all. Universities will probably start looking at which schools a student obtained a credit from. Got your credit from a credit mill named by the media? REJECTED.

Evil, thy name is “paying for grades”. 

I believe being able to pay for grades is awful, and should never be implemented in any school system. Not only is it unfair to those who can’t afford it, it is unfair to those who can. Education is free, take advantage of that and instead of paying for marks, earn them. That way, you can have the satisfaction of saying that you actually worked hard, instead of saying you paid for it. It is unfair for those who work so hard to earn their grades, when all you have to do is pay. Life has no shortcuts, and if you try to take them, it will only result in you going the long way in the end.  Do it right the first time, or you’ll end up having to work more. Instead of finding ways to cheat your way to a higher mark, just do your homework and study. Instead of paying for your marks, just work hard.  Nothing comes easy, but if you put in the effort, the results will be worth it.