The cost of developing an LSAT by LSAC

User avatar
Ocean64
Posts: 135
Joined: Tue Apr 26, 2011 5:53 pm

The cost of developing an LSAT by LSAC

Postby Ocean64 » Fri Sep 02, 2011 1:38 pm

According to my calculations, it costs LSAC somewhere between $703,806.85 and $1,407,613.71 to create a single LSAT.

this is based on information i gathered from an article about the stolen February 1997 LSAT

Representatives of LSAC, which is based in Pennsylvania, claim the robbery may have caused at least a half million dollars in damages.
"We initially told the (Los Angeles Police Department) an estimate of a half million to a million dollars and we haven't gone with a final figure yet," said Jim Vaseleck, associate counsel for LSAC. "This was a non-disclosed version of the LSAT. (The damage amount) really is about the cost of developing a new test."


Source: http://www.usc.edu/student-affairs/dt/V ... y.45c.html

and using a calculator to adjust that number for inflation
http://146.142.4.24/cgi-bin/cpicalc.pl

If this is true, i guess we shouldn't complain about paying $8.00 for a PT.

i found this fascinating, thought i'd share

imchuckbass58
Posts: 1245
Joined: Mon Mar 16, 2009 3:24 pm

Re: The cost of developing an LSAT test by LSAC

Postby imchuckbass58 » Fri Sep 02, 2011 1:47 pm

Well, until you factor in the fact that about 40,000 people take the LSAT each administration, and LSAC charges $140 for registration. So they make $5.6 million on each administration. Even if you cut that by 80% to account for waivers and other expenses (test administration, scoring, reporting), you can easily cover the cost of creating the test just from the administration itself.

Past that, anything like buying PTs, LSDAS, etc. are almost pure profit.

User avatar
Bildungsroman
Posts: 5548
Joined: Sun Apr 11, 2010 2:42 pm

Re: The cost of developing an LSAT test by LSAC

Postby Bildungsroman » Fri Sep 02, 2011 1:50 pm

imchuckbass58 wrote:Past that, anything like buying PTs, LSDAS, etc. are almost pure profit.

Wut?

imchuckbass58
Posts: 1245
Joined: Mon Mar 16, 2009 3:24 pm

Re: The cost of developing an LSAT test by LSAC

Postby imchuckbass58 » Fri Sep 02, 2011 1:59 pm

Bildungsroman wrote:
imchuckbass58 wrote:Past that, anything like buying PTs, LSDAS, etc. are almost pure profit.

Wut?


If you cover all of your costs using registration fees, then any additional fees that you make (i.e., from selling PTs) goes directly to your bottom line.

User avatar
Bildungsroman
Posts: 5548
Joined: Sun Apr 11, 2010 2:42 pm

Re: The cost of developing an LSAT test by LSAC

Postby Bildungsroman » Fri Sep 02, 2011 2:02 pm

imchuckbass58 wrote:
Bildungsroman wrote:
imchuckbass58 wrote:Past that, anything like buying PTs, LSDAS, etc. are almost pure profit.

Wut?


If you cover all of your costs using registration fees, then any additional fees that you make (i.e., from selling PTs) goes directly to your bottom line.

Except LSAC has costs beyond just producing and administering the LSAT.

And your analysis of how much money they make per administration and what their expenses are is based off of almost as little information as is possible.

bp shinners
Posts: 3091
Joined: Wed Mar 16, 2011 7:05 pm

Re: The cost of developing an LSAT test by LSAC

Postby bp shinners » Fri Sep 02, 2011 5:45 pm

imchuckbass58 wrote:
Bildungsroman wrote:
imchuckbass58 wrote:Past that, anything like buying PTs, LSDAS, etc. are almost pure profit.

Wut?


If you cover all of your costs using registration fees, then any additional fees that you make (i.e., from selling PTs) goes directly to your bottom line.


That's a big 'if', as you haven't factored in the cost of renting rooms, hiring proctors, having a system for signing people up, the actual cost of printing the exams, scoring the exams, etc...

While they make good money, the development cost isn't the end of their costs associated with each exam.

imchuckbass58
Posts: 1245
Joined: Mon Mar 16, 2009 3:24 pm

Re: The cost of developing an LSAT test by LSAC

Postby imchuckbass58 » Fri Sep 02, 2011 6:29 pm

bp shinners wrote:
imchuckbass58 wrote:
Bildungsroman wrote:
imchuckbass58 wrote:Past that, anything like buying PTs, LSDAS, etc. are almost pure profit.

Wut?


If you cover all of your costs using registration fees, then any additional fees that you make (i.e., from selling PTs) goes directly to your bottom line.


That's a big 'if', as you haven't factored in the cost of renting rooms, hiring proctors, having a system for signing people up, the actual cost of printing the exams, scoring the exams, etc...

While they make good money, the development cost isn't the end of their costs associated with each exam.


Yes, but there is no way this even approaches the fee. According to the above numbers, approximately $30 of each $140 fee goes to developing the test. That leaves $110. Let's ballpark everything else:

-Printing: Less than $5
-Scoring: Multiple choice scored by scantron, so negligible ($1-$2). For the writing sample, say you're paying someone $30/hour (generous) and they take 10 minutes to score a writing sample. That's $5. Let's be generous and call it $10 total for both scantron and hand-scoring, since maybe you have to have someone feeding/monitoring the scantron.
-Proctors and rooms: Let's say there are two proctors and 40 people in a room. Let's say the proctors have to work 8 hours (including check in, adminstration, and cleanup). Let's say they make $30/hour (again, generous). So personnel costs are $480. How much can it cost to rent a room for 40 people in a school on the weekend? I'd find it hard to believe it costs more than $500 or so since the space is basically unutilized otherwise. So $800 for proctors and rooms, spread over 40 people, is $25 per person.

All in that's another $40. So we're up to $70. There's still another $70 leftover (i.e., 2.8 million dollars from each administration) to cover things like computer systems, general overhead (accounting, legal, rent at the LSAC facility, etc).

I'm sure I'm missing stuff here. The point is that if you take a look at the magnitude of the numbers, there's no way the all-in costs of administration approach the fee. It's not LSAC, but organizations like the college board are massively profitable on an operational level ($55 million in 2007, and paying the CEO a $1 million salary). See here: --LinkRemoved--

The college board runs a 9.5% profit margin, and the SAT only costs $49. Granted the LSAT is slightly more complicated to come up with and score, and there's less volume to spread fixed costs, but at almost three times the fee, they must be making a killing.

User avatar
Bildungsroman
Posts: 5548
Joined: Sun Apr 11, 2010 2:42 pm

Re: The cost of developing an LSAT by LSAC

Postby Bildungsroman » Fri Sep 02, 2011 7:15 pm

Conclusions are easier to meet when you just use made-up numbers.

User avatar
lakers3peat
Posts: 493
Joined: Thu Sep 16, 2010 7:10 pm

Re: The cost of developing an LSAT by LSAC

Postby lakers3peat » Fri Sep 02, 2011 8:13 pm

Bildungsroman wrote:Conclusions are easier to meet when you just use made-up numbers.



+1 lol


who cares? haha

User avatar
941law
Posts: 425
Joined: Wed Aug 24, 2011 9:21 am

Re: The cost of developing an LSAT by LSAC

Postby 941law » Fri Sep 02, 2011 11:53 pm

In 1997, three people were arrested in connection with the theft of the Law School Admission Test (LSAT), a test required by most law schools. One of the suspects had enrolled for the test under a false name and was able to enter the exam room using a fake identification card. After the test began, he fled with his copy. Two students were waiting at the University of Hawaii to take the same test two hours later. During the exam, answers were transmitted from Los Angeles to the students, who were equipped with alphanumeric pagers. They scored in the 99th percentile on the LSAT, but were caught after police identified the suspect who stole the test from Los Angeles through the fingerprint he was required to provide before entering the examination room. All three men were arraigned Jan. 7 on charges of robbery, grand theft and conspiracy.

User avatar
LSAT World
Posts: 21
Joined: Sat Aug 27, 2011 7:12 pm

Re: The cost of developing an LSAT by LSAC

Postby LSAT World » Sat Sep 03, 2011 11:09 pm

Just so you know:

The Law School Admission Council (LSAC) is a nonprofit organization whose members include more than 200 law schools throughout the United States and Canada.

User avatar
johansantana21
Posts: 855
Joined: Sat Jul 23, 2011 7:11 pm

Re: The cost of developing an LSAT test by LSAC

Postby johansantana21 » Sat Sep 03, 2011 11:21 pm

For the writing sample, say you're paying someone $30/hour (generous) and they take 10 minutes to score a writing sample. That's $5.


wut. I may have taken the LSAT a while ago but...they grade your writing sample now?

User avatar
lakers3peat
Posts: 493
Joined: Thu Sep 16, 2010 7:10 pm

Re: The cost of developing an LSAT by LSAC

Postby lakers3peat » Sun Sep 04, 2011 12:11 am

941law wrote:
In 1997, three people were arrested in connection with the theft of the Law School Admission Test (LSAT), a test required by most law schools. One of the suspects had enrolled for the test under a false name and was able to enter the exam room using a fake identification card. After the test began, he fled with his copy. Two students were waiting at the University of Hawaii to take the same test two hours later. During the exam, answers were transmitted from Los Angeles to the students, who were equipped with alphanumeric pagers. They scored in the 99th percentile on the LSAT, but were caught after police identified the suspect who stole the test from Los Angeles through the fingerprint he was required to provide before entering the examination room. All three men were arraigned Jan. 7 on charges of robbery, grand theft and conspiracy.

.



When I took the test in December, I got finger printed..

When I took it in June, at a different center, they never finger printed me...

is that weird?

bp shinners
Posts: 3091
Joined: Wed Mar 16, 2011 7:05 pm

Re: The cost of developing an LSAT by LSAC

Postby bp shinners » Mon Sep 05, 2011 11:46 am

lakers3peat wrote:When I took the test in December, I got finger printed..

When I took it in June, at a different center, they never finger printed me...

is that weird?


Recent policy change; now, you need a passport photo.

de5igual
Posts: 1463
Joined: Mon Dec 08, 2008 11:52 pm

Re: The cost of developing an LSAT by LSAC

Postby de5igual » Mon Sep 05, 2011 11:50 am

LSAT World wrote:Just so you know:

The Law School Admission Council (LSAC) is a nonprofit organization whose members include more than 200 law schools throughout the United States and Canada.


nonprofit just means profits can't be distributed, not that there can't be profits involved or that no one in the organization is making bank. fyi.

User avatar
LSAT World
Posts: 21
Joined: Sat Aug 27, 2011 7:12 pm

Re: The cost of developing an LSAT by LSAC

Postby LSAT World » Mon Sep 05, 2011 12:25 pm

The thing is that lsac surely has some revenue but it's not enough to cover all expenses. I've been working with a person from Lsac for some time and I've dropped her a question about how lsac functions. In short she said that she's not qualified to answer this question properly but important thing to know is that lsac clients are law schools, not test takers. Moreover, law schools cover fixed percent of the lsac's expenses. Other comes from the revenue lsac makes from test materials and test admission. Any profit made is kept for next tests. From what I know the profit is not substantial because lsac rents test centers, delivers tests in confidentiality, has large employee base and of course they have expenses that relate to the test making process. I would guess that they also might spend big sum on taking copyrighted texts from actual journals, books, etc. And as a last point: lsac was created by ETS, another private nonprofit organization. Probably if lsac or ETS made substantial profit they would have received less grants/money from government and/or schools to make them closer to a truly non profit company.

User avatar
rivermaker
Posts: 156
Joined: Sat Jun 19, 2010 2:16 pm

Re: The cost of developing an LSAT by LSAC

Postby rivermaker » Tue Sep 06, 2011 12:40 pm

They have to pay their employees...




Return to “LSAT Prep and Discussion Forum”

Who is online

Users browsing this forum: Alexandros, Baidu [Spider], dontsaywhatyoumean, gwillygecko, Pozzo, wildquest8200, Yahoo [Bot] and 16 guests