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Estimating the Welfare Gains from Public Schools in Rural India

Author

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  • Debopam Bhattacharya

    (University of Cambridge)

  • Anders Kjelsrud

    (University of Oslo and Statistics Norway)

  • Rohini Somanathan

    (Delhi School of Economics)

Abstract

We adapt recently developed econometric techniques to estimate the distribution of welfare gains from public schools in rural India. Individuals have preferences over school quality and income spent on other goods. In a situation where both private and pubic schools are available, we define the cash-equivalent value of the public school as the hypothetical income sacrifice that would equate an individual’s utility to his/her utility when only the private school was available. We apply this procedure to data on income, enrollment and school quality from the Indian Human Development Survey of 2012 and estimate the distribution of implicit transfers across states and income deciles. We find these transfers are progressive. Poor households receive more on average because they have higher fertility and because their children are more likely to attend state schools. We also find however that transfers are particularly small for some of the poorest states in central and eastern India because of their low public school quality. Our methods can be generalized to measure the distribution of benefits from other types of public goods and government services.

Suggested Citation

  • Debopam Bhattacharya & Anders Kjelsrud & Rohini Somanathan, 2021. "Estimating the Welfare Gains from Public Schools in Rural India," Sankhya B: The Indian Journal of Statistics, Springer;Indian Statistical Institute, vol. 83(2), pages 430-443, November.
    • Handle: RePEc:spr:sankhb:v:83:y:2021:i:2:d:10.1007_s13571-019-00213-x
    DOI: 10.1007/s13571-019-00213-x
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    References listed on IDEAS

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    1. Anders Kjelsrud & Rohini Somanathan, 2017. "Poverty Targeting Through Public Goods," Working papers 271, Centre for Development Economics, Delhi School of Economics.
    2. Geeta Gandhi Kingdon, 2020. "The Private Schooling Phenomenon in India: A Review," Journal of Development Studies, Taylor & Francis Journals, vol. 56(10), pages 1795-1817, October.
    3. Kingdon, Geeta & Teal, Francis, 2010. "Teacher unions, teacher pay and student performance in India: A pupil fixed effects approach," Journal of Development Economics, Elsevier, vol. 91(2), pages 278-288, March.
    4. Anders Kjelsrud & Rohini Somanathan, 2014. "Incorporating Public Good Availability into the Measurement of Poverty," Working Papers id:5784, eSocialSciences.
    5. Debopam Bhattacharya, 2018. "Empirical welfare analysis for discrete choice: Some general results," Quantitative Economics, Econometric Society, vol. 9(2), pages 571-615, July.
    6. Michael Kremer & Nazmul Chaudhury & F. Halsey Rogers & Karthik Muralidharan & Jeffrey Hammer, 2005. "Teacher Absence in India: A Snapshot," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 658-667, 04/05.
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