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Childcare quality and pricing: evidence from Wisconsin

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  • Benjamin Artz
  • David M. Welsch

Abstract

Childcare prices vary dramatically both between and within states. We identify the effects of demographic and provider characteristics on childcare pricing, but focus primarily on whether unique government-provided information on childcare quality has an effect on pricing. Using provider-level observations across three adjacent counties in southern Wisconsin, we find that this government-provided information on childcare quality does not significantly affect pricing. Recognizing that information asymmetry may be the root cause of the insignificant relationship, we test the relationship further within multiple subsamples and with alternative models. Only the lowest quality childcare providers are significantly associated with lower prices in areas that we hypothesize suffer from greater information asymmetry.

Suggested Citation

  • Benjamin Artz & David M. Welsch, 2014. "Childcare quality and pricing: evidence from Wisconsin," Applied Economics, Taylor & Francis Journals, vol. 46(35), pages 4276-4289, December.
    • Handle: RePEc:taf:applec:v:46:y:2014:i:35:p:4276-4289
    DOI: 10.1080/00036846.2014.955256
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    1. V. Joseph Hotz & M. Rebecca Kilburn, "undated". "Regulating Child Care: The Effects of State Regulations on Child Care Demand and Its Cost," University of Chicago - Population Research Center 94-10, Chicago - Population Research Center.
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    Cited by:

    1. Camehl, Georg F. & Schober, Pia S. & Spiess, C. Katharina, 2018. "Information asymmetries between parents and educators in German childcare institutions," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue Latest Ar, pages 1-23.
    2. Huebener, Mathias & Pape, Astrid & Spiess, C. Katharina, 2020. "Parental labour supply responses to the abolition of day care fees," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 510-543.

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