Tutoring services as a Veblen good

This is just a short thought that I thought I would record. Recently, I discovered that my school, the University of Waterloo, has a web tool that connects potential tutors to prospective students, called Tutor Connect (https://uwaterloo.ca/student-success/tutor-connect). I posted an ad there because I wouldn’t mind some extra cash in time for the holidays. It is relatively difficult to use and it only allows you to list a single asking price (range) for your services. My intuition is that I would charge less for low level courses and higher for higher level courses. Regardless, I put down the highest possible price range allowed on the website. I browsed some of the other listings and found that there were several others with similar qualifications that were asking half as much as I was. I decided not to lower my asking price because I figured anything less than the amount listed probably wasn’t worth my time anyway.

To my surprise, several people contacted me and inquired about my services within days of me posting the ad. This led to me thinking that tutoring services might be a Veblen good.

A Veblen good is essentially a luxury good, and it is understood that most people purchasing Veblen goods are making the purchase not for direct consumption but as a status symbol. Veblen goods, along with Giffen goods, are two prominent examples of goods with positive price elasticity of demand. That is, the more expensive Veblen goods get, the more desirable they become. I feel tutoring is the same thing; the more you ask for the more people tend to assume that you are good at what you do, and people tend to want to hire you.

This is perhaps a good piece of information not for prospective tutors, but for anyone looking for work. Ask for what you deserve, because if you don’t believe in your own value, then no one else will.


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