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Why Do Households Leave School Value Added on the Table? The Roles of Information and Preferences

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  • Robert Ainsworth
  • Rajeev Dehejia
  • Cristian Pop-Eleches
  • Miguel Urquiola

Abstract

Romanian households could choose schools with one standard deviation worth of additional value added. Why do households leave value added "on the table"? We study two possibilities: (i) information and (ii) preferences for other school traits. In an experiment, we inform randomly selected households about schools' value added. These households choose schools with up to 0.2 standard deviations of additional value added. We then estimate a discrete choice model and show that households have preferences for a variety of school traits. As a result, fully correcting households' beliefs would eliminate at most a quarter of the value added that households leave unexploited.

Suggested Citation

  • Robert Ainsworth & Rajeev Dehejia & Cristian Pop-Eleches & Miguel Urquiola, 2023. "Why Do Households Leave School Value Added on the Table? The Roles of Information and Preferences," American Economic Review, American Economic Association, vol. 113(4), pages 1049-1082, April.
    • Handle: RePEc:aea:aecrev:v:113:y:2023:i:4:p:1049-82
    DOI: 10.1257/aer.20210949
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    Cited by:

    1. Andrei Munteanu, 2024. "School Choice, Student Sorting and Academic Performance," Cahiers de recherche / Working Papers 2401, Chaire de recherche sur les enjeux économiques intergénérationnels / Research Chair in Intergenerational Economics.
    2. Elisa Facchetti & Lorenzo Neri & Marco Ovidi, 2021. "Should you Meet The Parents? The impact of information on non-test score attributes on school choice," DISCE - Working Papers del Dipartimento di Economia e Finanza def113, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).

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    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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