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Estimating the value and distributional effects of free state schooling

Author

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  • Andreou, Sofia N.
  • Koutsampelas, Christos
  • Pashardes, Panos

Abstract

The effects of free of charge state education on income distribution are often studied by allocating government education outlays to households, assuming that these outlays equal the benefit which households attach to state schooling. This paper proposes a demand analysis approach to estimating the ‘true’ value of state education as perceived by consumers, and uses the results to assess the inefficiency of public provision. Empirical analysis based on data from Cyprus suggests that state schooling costs twice the amount households are willing to pay for. The implications of this finding for the equality and anti-poverty effects of state education are illustrated.

Suggested Citation

  • Andreou, Sofia N. & Koutsampelas, Christos & Pashardes, Panos, 2014. "Estimating the value and distributional effects of free state schooling," Economics Letters, Elsevier, vol. 125(2), pages 303-305.
    • Handle: RePEc:eee:ecolet:v:125:y:2014:i:2:p:303-305
    DOI: 10.1016/j.econlet.2014.09.027
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    References listed on IDEAS

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    1. Aaberge, Rolf & Bhuller, Manudeep & Langørgen, Audun & Mogstad, Magne, 2010. "The distributional impact of public services when needs differ," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 549-562, October.
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    4. Gerlinde Verbist & Michael Förster & Maria Vaalavuo, 2012. "The Impact of Publicly Provided Services on the Distribution of Resources: Review of New Results and Methods," OECD Social, Employment and Migration Working Papers 130, OECD Publishing.
    5. Blundell, Richard & Pashardes, Panos & Weber, Guglielmo, 1993. "What Do We Learn About Consumer Demand Patterns from Micro Data?," American Economic Review, American Economic Association, vol. 83(3), pages 570-597, June.
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    Cited by:

    1. Janina Kotlinska & Joanna Nucinska & Jacek Bednarz, 2021. "Education Financing: Explaining the Expenditure Concentration Gap between the State and Local Governments in Poland 2008-2019," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 564-578.

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    More about this item

    Keywords

    Education; Inequality; Poverty; Consumer demand;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods

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