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The Value of Private Schools: Evidence from Pakistan

Author

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  • Hugo Reis
  • Jishnu Das
  • Pedro Carneiro

Abstract

Using unique data from Pakistan we estimate a model of demand for differentiated products in 112 rural education markets with significant choice among public and private schools. Our model accounts for the endogeneity of school fees and the characteristics of students attending the school. As expected, central determinants of school choice are the distance to school, school fees, and the characteristics of peers. Families are willing to pay on average between 75% and 115% of the average annual private school fee for a 500 meter reduction in distance. In contrast, price elasticities are low: -0.5 for girls and -0.2 for boys. Both distance and price elasticities are consistent with other estimates in the literature, but at odds with a belief among policy makers that school fees deter enrollment and participation in private schooling. Using the estimates from the demand model we show that the existence of a low fee private school market is of great value for households in our sample, reaching about 25% to 100% of monthly per capita income for those choosing private schools. A voucher policy that reduces the fees of private schools to $0 (from an average annual fee of $13) increases private school enrollment by 7.5 percentage points for girls and 4.2 percentage points for boys. Our demand estimates and policy simulations, which account for key challenges specific to the schooling market, help situate ongoing debate around private schools within a larger framework of consumer choice and welfare.

Suggested Citation

  • Hugo Reis & Jishnu Das & Pedro Carneiro, 2016. "The Value of Private Schools: Evidence from Pakistan," Working Papers id:10909, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:10909
    Note: Institutional Papers
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    Cited by:

    1. Tahir Andrabi & Jishnu Das & Asim Ijaz Khwaja, 2017. "Report Cards: The Impact of Providing School and Child Test Scores on Educational Markets," American Economic Review, American Economic Association, vol. 107(6), pages 1535-1563, June.
    2. Marine de Talance, 2017. "Quality Perceptions and School Choice in Rural Pakistan," Working Papers hal-01663029, HAL.
    3. Hussain, Iftikhar, 2023. "Housing market and school choice response to school quality information shocks✰," Journal of Urban Economics, Elsevier, vol. 138(C).
    4. Karthik Muralidharan & Abhijeet Singh & Alejandro J. Ganimian, 2019. "Disrupting Education? Experimental Evidence on Technology-Aided Instruction in India," American Economic Review, American Economic Association, vol. 109(4), pages 1426-1460, April.
    5. Marine de Talancé, 2016. "Quality perceptions and school choice in rural Pakistan," Working Papers DT/2016/15, DIAL (Développement, Institutions et Mondialisation).
    6. Felipe Barrera-Osorio & David S. Blakeslee & Matthew Hoover & Leigh Linden & Dhushyanth Raju & Stephen P. Ryan, 2022. "Delivering Education to the Underserved through a Public-Private Partnership Program in Pakistan," The Review of Economics and Statistics, MIT Press, vol. 104(3), pages 399-416, May.
    7. Bagde, Surendrakumar & Epple, Dennis & Taylor, Lowell, 2022. "The emergence of private high schools in India: The impact of public-private competition on public school students," Journal of Public Economics, Elsevier, vol. 215(C).
    8. Bau, Natalie, 2019. "Estimating an Equilibrium Model of Horizontal Competition in Education," CEPR Discussion Papers 13924, C.E.P.R. Discussion Papers.
    9. Ansari, Ali H., 2020. "Cream skimming? Evaluating the access to Punjab’s public-private partnership programs in education," International Journal of Educational Development, Elsevier, vol. 72(C).
    10. Christopher A. Neilson, 2021. "Targeted Vouchers, Competition Among Schools, and the Academic Achievement of Poor Students," Working Papers 2021-48, Princeton University. Economics Department..
    11. Hugo Reis, 2020. "Girls' Schooling Choices And Home Production: Evidence From Pakistan," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 61(2), pages 783-819, May.
    12. Du, Xinming, 2023. "Competing with clean air: Pollution disclosure and college desirability," Ecological Economics, Elsevier, vol. 204(PA).

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    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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