IT courses in Russia, like the classic "Lemons" market

In his famous article “The Market for 'Lemons': Quality Uncertainty and the Market Mechanism” (1970), Akerlof described how information asymmetry (when a seller knows more about a product than a buyer) can lead to the displacement of quality goods from the market by low-quality goods (“lemons”). This happens because buyers, unable to distinguish quality goods from low-quality ones, are willing to pay only the average price, which is unprofitable for sellers of quality goods. In 2001, he (and a number of other economists) were awarded the Nobel Prize for this work.

Recently I had the idea that the computer courses market in Russia has the classic features described in the Limonov model.

Let's look at the reasons causing the “lemons” market:

1. Information asymmetry:

Difficulty of quality assessment: It is difficult for potential students to assess the quality of a course before taking it. The advertising and promises may be enticing, but the actual content and faculty may not live up to expectations.
Lack of standardization: There are no uniform quality standards for computer courses. This makes it difficult to compare different offers and choose the best option.
Information noise: The huge number of online schools and courses creates information noise, making it difficult to find a quality education.

2. Low entry threshold to the market:

It's easy to create an online course: Creating an online course does not require significant investment or special permissions. In fact, to enter, it is enough to lay out a landing page and recruit listeners. This attracts many players to the market. And junk offers are the majority among this multitude.
No serious barriers: there is virtually no certification of teachers. The situation when a former student, not having found a job in business, goes to teach at the courses that graduated him is a norm that they are not embarrassed about.

3. Lack of transparency:

Reviews and ratings: Reviews and course ratings may be inflated or may not reflect the real picture.
Hidden conditions: Some schools may hide important details, such as the qualifications of teachers or the amount of material included.

4. Insufficient protection of consumer rights:

Difficulty of getting money back: In case of dissatisfaction with the quality of the course, a refund may be difficult, since the service has been provided, but there is no quality certification.
Lack of effective control mechanisms: Mechanisms for quality control of educational services in the IT sector are not sufficiently developed.

As a result:

“Good” courses are being replaced by “lemons”: Students who encounter low-quality courses lose confidence in the market as a whole. This makes it difficult for quality educational programs to develop, as they find it harder to compete with cheaper, but lower-quality analogues.
Reducing the overall value of education: The prevalence of “lemons” reduces the overall value of IT education, undermines trust in online learning, and makes it difficult to find qualified specialists.

The situation is especially aggravated with courses for schoolchildren. Since if graduates of regular “vaiTi” courses immediately start looking for work, then schoolchildren still have to study and study. Therefore, the reviews from them and their parents will be the most subjective.

What can be done?

If we accept the diagnosis as the basis, the treatment is already known. Akerlof, Michael Spence and Joseph Stiglitz have written out the recipe in detail:

Authors who have studied the phenomenon of the “lemons” market (Akerlof, Spence, Stiglitz and others) have written out a detailed recipe:

1. Signaling:

Certification and accreditation: Independent organizations can certify and accredit products and services, confirming their quality and compliance with certain standards. This helps buyers distinguish quality offers from “lemons.”
Guarantees and money back: Providing guarantees and the possibility of a refund in case of dissatisfaction with the quality of a product or service reduces risks for buyers and encourages sellers to offer quality products.
Reputation and branding: Companies that invest in their reputation and branding signal their commitment to providing quality products and services to maintain customer trust.

2. Screening:

Reviews and ratings: Buyers can use reviews and ratings from other buyers to evaluate the quality of goods and services.
Testing and trial periods: Providing the opportunity to test a product or service before purchasing, or to use a trial period, allows buyers to get a more complete idea of the quality.
Comparison of features and prices: Careful comparison of features and prices of different offers helps buyers make a more informed choice.

3. State regulation:

Consumer protection legislation: Consumer protection laws may hold sellers liable for providing false information or selling poor quality goods.
Quality standards: The government may set mandatory quality standards for certain goods and services to prevent “lemons” from appearing on the market.
Licensing and regulation: Some industries may require a license or permit to operate, which helps weed out unscrupulous sellers.

4. Improving information literacy:

Consumer Education: Improving consumer information literacy helps them better understand the characteristics of products and services, critically evaluate information, and make more informed decisions.
Independent reviews and research: Independent reviews and research of products and services provide buyers with objective information, helping them make the right choice.

Why is all this written?

No! I do not suggest that everyone immediately go to clean up the market of courses. It is just that, after reading one good advertisement of good (possibly) courses, I thought about the mechanism of separating the wheat from the chaff. And I remembered this old economic principle.

Do I believe that diagnosis is enough for recovery? No! Economists themselves have noted that the mechanisms for market recovery require coordinated work by business, consumers and the state. IMHO — in our ecumenes, this is more like a Swan, a Cancer and a Pike than a balanced team.

I just saw the idea and decided to post it.