Willingness to Pay for Primary Education in Rural Pakistan
Highly subsidised public schools are the principal provider of education in the rural areas of Pakistan. Steady growth of school age population over time coupled with stagnant public funding has put enormous pressure on this system. The alternative of cost recovery through user charges has its own critics. They argue that introduction of tuition fees would substantially reduce the already small representation of low-income households in primary schools due to high price elasticity of their demand for schooling. Moreover, the revenue-generating potential of this policy may also be limited due to same reason. The present study uses a discrete choice random utility model of household utility maximising behaviour to evaluate feasibility and consequences of introducing user fees in primary schools in rural Pakistan, particularly with reference to above criticisms. The demand function for school enrolment derived from this model allows us to test the hypothesis that price elasticity of demand for schooling varies with income. It also provides estimates of the parameters of the utility function needed for measuring parents’ willingness to pay for their childrens’ education if money generated from tuition fees is reinvested in education. The estimated demand function takes into account total price of education, including opportunity cost. Estimation results show that price elasticity of demand for school enrolment is higher for lower-income groups. Hence school enrolment of the poorest children would bear the main brunt of user fees policy. Children’s gender and age, father’s education, presence of T.V. in the household, and community variables like the presence of an elected district council member, electricity, and public transport in the village turn out to be significant influences on the probability of primary school enrolment. Willingness to pay for education is lower for poorer households and can generate revenues to cover only a fraction of the cost of running a school. Hence the need to search for other sources of financing primary education in rural Pakistan.
Volume (Year): 43 (2004)
Issue (Month): 1 ()
|Contact details of provider:|| Postal: |
Web page: http://www.pide.org.pk
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Frank J. Cesario, 1976. "Value of Time in Recreation Benefit Studies," Land Economics, University of Wisconsin Press, vol. 52(1), pages 32-41.
- Muhammad Hussain Malik & Najam-Us-Saqib, 1985. "Who Bears the Burden of Federal Taxes in Pakistan?," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 24(3-4), pages 497-509.
- Saul Hoffman & Greg Duncan, 1988. "Multinomial and conditional logit discrete-choice models in demography," Demography, Springer, vol. 25(3), pages 415-427, August.
- Gross, David J., 1988. "Estimating willingness to pay for housing characteristics: An application of the Ellickson bid-rent model," Journal of Urban Economics, Elsevier, vol. 24(1), pages 95-112, July.
- Harold Alderman & Jere R. Behrman & David R. Ross & Richard Sabot, 1996. "Decomposing the Gender Gap in Cognitive Skills in a Poor Rural Economy," Journal of Human Resources, University of Wisconsin Press, vol. 31(1), pages 229-254.
- John Knodel & Malinee Wongsith, 1991. "Family size and children’s education in Thailand: Evidence from a national sample," Demography, Springer, vol. 28(1), pages 119-131, February.
- Small, Kenneth A & Rosen, Harvey S, 1981.
"Applied Welfare Economics with Discrete Choice Models,"
Econometric Society, vol. 49(1), pages 105-30, January.
- Harvey S. Rosen & Kenneth A. Small, 1979. "Applied Welfare Economics with Discrete Choice Models," NBER Working Papers 0319, National Bureau of Economic Research, Inc.
- Stephen Farber & Alicia Rambaldi, 1993. "Willingness To Pay For Air Quality: The Case Of Outdoor Exercise," Contemporary Economic Policy, Western Economic Association International, vol. 11(4), pages 19-30, October.
- Mullen, John D. & Wohlgenant, Michael K., 1991.
"The Willingness Of Consumers To Pay For Attributes Of Lamb,"
Australian Journal of Agricultural Economics,
Australian Agricultural and Resource Economics Society, vol. 35(03), December.
- John D. Mullen & Michael K. Wohlgenant, 1991. "The Willingness Of Consumers To Pay For Attributes Of Lamb," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 35(3), pages 247-262, December.
- Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, vol. 45(1), pages 1-22, January.
- Zeba A. Sathar & Cynthia B. Lloyd, 1994. "Who Gets Primary Schooling in Pakistan: Inequalities among and within Families," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 33(2), pages 103-134.
- Gronau, Reuben, 1987.
"Home production -- A survey,"
Handbook of Labor Economics,
in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 4, pages 273-304
- Reuben Gronau & R. Layard, . "Home Production - A Survey," University of Chicago - Population Research Center 85-2, Chicago - Population Research Center.
- Akin, John S, et al, 1986. "The Demand for Primary Health Care Services in the Bicol Region of the Philippines," Economic Development and Cultural Change, University of Chicago Press, vol. 34(4), pages 755-82, July.
- Hamilton, Bruce W. & Macauley, Molly K., 1991. "Determinants and consequences of the private -- Public school choice," Journal of Urban Economics, Elsevier, vol. 29(3), pages 282-294, May.
- Hamilton, Bruce W., 1983. "The flypaper effect and other anomalies," Journal of Public Economics, Elsevier, vol. 22(3), pages 347-361, December.
- Jorgenson, D.W. & Fraumeni, B.M., 1991.
"The Output Of The Education Sector,"
Harvard Institute of Economic Research Working Papers
1543, Harvard - Institute of Economic Research.
- Gertler, Paul & Glewwe, Paul, 1990. "The willingness to pay for education in developing countries : Evidence from rural Peru," Journal of Public Economics, Elsevier, vol. 42(3), pages 251-275, August.
- Paul J. Gertler & Luis Locay & Warren C. Sanderson, 1987.
"Are User Fees Regressive? The Welfare Implications of Health Care Financing Proposals in Peru,"
NBER Working Papers
2299, National Bureau of Economic Research, Inc.
- Gertler, Paul & Locay, Luis & Sanderson, Warren, 1987. "Are user fees regressive? : The welfare implications of health care financing proposals in Peru," Journal of Econometrics, Elsevier, vol. 36(1-2), pages 67-88.
- Robert H. Haveman & Barbara L. Wolfe, 1984. "Schooling and Economic Well-Being: The Role of Nonmarket Effects," Journal of Human Resources, University of Wisconsin Press, vol. 19(3), pages 377-407.
- Muhammad Hussain Malik & Najam Us Saqib, 1989. "Tax Incidence by Income Classes in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 28(1), pages 13-26.
- Oates, Wallace E, 1981. "On Local Finance and the Tiebout Model," American Economic Review, American Economic Association, vol. 71(2), pages 93-98, May.
- Gertler, Paul & Glewwe, Paul, 1992. "The Willingness to Pay for Education for Daughters in Contrast to Sons: Evidence from Rural Peru," World Bank Economic Review, World Bank Group, vol. 6(1), pages 171-88, January.
When requesting a correction, please mention this item's handle: RePEc:pid:journl:v:43:y:2004:i:1:p:27-51. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Khurram Iqbal)
If references are entirely missing, you can add them using this form.