Estimation of Household Educational Expenditure Model Using Censored Data

In recent decades, due to the growing importance of the role of human capital in economic models, the importance of the issue of education has risen in economics literatures. This paper aims to investigate the determinants of educational costs in micro level (household) in Iran. The determinants affecting educational costs are categorized at four levels: household characteristics, child characteristics, head characteristics and mother characteristics. The effect of these categories is estimated thorough a censored Tobit model for Iran household survey in 2016. This model has been chosen so that zero cost in some cases can be reported. The result shows that urban residency and having girl Childs (versus boy) are context factors that increase expenditure on education. Moreover, as men have traditionally been the head of families in Iran and their income has been higher than women’s, the gender of the head of the household is another important factor influencing the educational costs of the family. Finally, the analysis of the characteristics of the mother and of the head of the family shows that transition of the financial capital to children takes place mainly thorough the head of the family (stronger effect of the head’s income compared with the mother’s income) while the transition of the human capital to children takes place mainly thorough the mother of the family (stronger effect of mother’s education compared with the head’s education)