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School Inputs, Household Substitution, and Test Scores

  • Jishnu Das
  • Stefan Dercon
  • James Habyarimana
  • Pramila Krishnan
  • Karthik Muralidharan
  • Venkatesh Sundararaman

Empirical studies of the relationship between school inputs and test scores typically do not account for household responses to changes in school inputs. Evidence from India and Zambia shows that student test scores are higher when schools receive unanticipated grants, but there is no impact of grants that are anticipated. We show that the most likely mechanism for this result is that households offset their own spending in response to anticipated grants. Our results confirm the importance of optimal household responses and suggest caution when interpreting estimates of school inputs on learning outcomes as parameters of an education production function. (JEL D12, H52, I21, O15)

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Article provided by American Economic Association in its journal American Economic Journal: Applied Economics.

Volume (Year): 5 (2013)
Issue (Month): 2 (April)
Pages: 29-57

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Handle: RePEc:aea:aejapp:v:5:y:2013:i:2:p:29-57
Note: DOI: 10.1257/app.5.2.29
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  1. Becker, Gary S & Tomes, Nigel, 1976. "Child Endowments and the Quantity and Quality of Children," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages S143-62, August.
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