# Student Testing

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## Student Test Prep Market - SAT

According to a rough estimate based on a triangulated figure for per-student SAT prep spending and the number of teens ages 15-18 in Travis County, TX, the SAT prep market in Austin, Texas is worth a little over \$14.4 million.

The figure for per-student SAT prep spending is unfortunately out-of-date, but is the only amount found available in the public domain. That figure is used below as part of the calculations and is supplemented with a more recent per-student estimate. The average of those estimates is used and multiplied by the total population of possible SAT takers in the Austin area to calculate an estimated market size. The calculations below are based on these rough figures -- as SAT prep costs can vary widely. Free options exist, but costs often exceed \$1,000 per student for some services, so this is most likely a conservative estimate.

### AUSTIN SAT PREP MARKET

As of 2011, the SAT prep market was worth around \$530 million with 1.5 million students purchasing SAT prep services each year -- that averages to \$353.30 per student (\$530 million / 1.5 million students). To get a more recent estimate of SAT spending, I found this blog post, which gives percentages of student spending -- 44.2% spent under \$100, 36.5% spent between \$100 and \$300, and 19.2% spent over \$300. I've used those figures to get a rough weighted average of per-student spending in 2016:

(0.442*\$100) + (.365*\$200) + (.192*\$300) = \$174.80 per student in 2016

This drop-off does ring true, as the total market for test prep in the US was worth just \$328 million in 2016. However, going forward in my estimate I will average the 2011 figure with the 2016 figure to account for those students who spent well over \$300 -- personalized online prep can run upwards of \$1,000 per student. The average of those two numbers is:

(\$353.30 + \$174.80) / 2 = \$264.05

To find the total addressable market for SAT prep services, then, we'll multiply the average per-student cost by the number of possible SAT takers in the Austin, TX area. The SAT is generally taken by high school sophomores and above, who are generally between the ages of 15 and 18. The Texas Demographic Center provides statistics by county and by age -- in Travis County in 2017, there were 54,649 people age 15-18. Multiplying this population with the estimated per-student cost for SAT prep gives us the market size for Austin:

\$264.05 x 54,649 = \$14,430,068

### CONCLUSION

Very rough estimates put the total market size for SAT prep in Austin, TX at just over \$14.4 million. This figure is based on an estimate for average per-student spending on SAT prep and on the number of 15-18-year-olds in the Austin area (Travis County) in 2017.
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