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Whose education matters in the determination of household income

  • Jolliffe, Dean

This paper aims to answer how best to model education attainment, which is an individual-level variable, in household-level income functions. The accepted practice in the literature is to use the education level of the household head. This paper compares the head-of-household model to three competing models and concludes that the maximum or average level of education in the household is a better explanatory variable of household income. Least absolute deviations (LAD) estimators and censored least absolute deviations (CLAD) estimators are used to predict income. Standard errors, which are robust to violations of homoscedasticity and independence, are generated by a boot-strap method that replicates the two-stage sample design.

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Paper provided by International Food Policy Research Institute (IFPRI) in its series FCND discussion papers with number 39.

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Date of creation: 1997
Date of revision:
Handle: RePEc:fpr:fcnddp:39
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  1. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
  2. Breusch, T S & Pagan, A R, 1979. "A Simple Test for Heteroscedasticity and Random Coefficient Variation," Econometrica, Econometric Society, vol. 47(5), pages 1287-94, September.
  3. Arabmazar, Abbas & Schmidt, Peter, 1981. "Further evidence on the robustness of the Tobit estimator to heteroskedasticity," Journal of Econometrics, Elsevier, vol. 17(2), pages 253-258, November.
  4. Pagan, Adrian & Vella, Frank, 1989. "Diagnostic Tests for Models Based on Individual Data: A Survey," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 4(S), pages S29-59, Supplemen.
  5. Vijverberg, P.M., 1992. "Measuring Income from Family Enterprises with Household Surveys," Papers 84, World Bank - Living Standards Measurement.
  6. Fane, George, 1975. "Education and the Managerial Efficiency of Farmers," The Review of Economics and Statistics, MIT Press, vol. 57(4), pages 452-61, November.
  7. Jamison, Dean T. & Moock, Peter R., 1984. "Farmer education and farm efficiency in Nepal: The role of schooling, extension services, and cognitive skills," World Development, Elsevier, vol. 12(1), pages 67-86, January.
  8. Jolliffe, Dean, 1998. "Skills, Schooling, and Household Income in Ghana," World Bank Economic Review, World Bank Group, vol. 12(1), pages 81-104, January.
  9. Lockheed, Marlaine E & Jamison, Dean T & Lau, Lawrence J, 1987. "Farmer Education and Farm Efficiency: Reply," Economic Development and Cultural Change, University of Chicago Press, vol. 35(3), pages 643-44, April.
  10. Psacharopoulos, George, 1994. "Returns to investment in education: A global update," World Development, Elsevier, vol. 22(9), pages 1325-1343, September.
  11. Powell, James L., 1984. "Least absolute deviations estimation for the censored regression model," Journal of Econometrics, Elsevier, vol. 25(3), pages 303-325, July.
  12. Vijverberg, Wim P M, 1987. "Non-normality as Distributional Misspecification in Single-Equation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 49(4), pages 417-30, November.
  13. George Psacharopoulos, 1985. "Returns to Education: A Further International Update and Implications," Journal of Human Resources, University of Wisconsin Press, vol. 20(4), pages 583-604.
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