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School Choice in Chile: Looking at the Demand Side

Author

Listed:
  • Francisco Gallego

    (Instituto de Economía. Pontificia Universidad Católica de Chile.)

  • Andrés Hernando

Abstract

How do parents choose among schools when they are allowed to do so? In this paper, we analyze detailed information of 70,000 fourth-graders attending about 1,200 publicly subsidized schools in the context of the Chilean voucher system. We model the school choice of a household as a discrete choice of a single school, based on the random utility model developed by McFadden (1974) and the specification of Berry, Levinsohn, and Pakes (1995), which includes choice-specific unobservable characteristics and deals with potential endogeneity. Our results imply that households value some attributes of schools, with the two most important dimensions being test scores and distance to school. Interestingly, at the same time, our results suggest there is a lot of heterogeneity in preferences because the valuation of most school attributes depend on household characteristics. In particular, we find that while proximity to school is an inferior attribute, test scores is a normal attribute. We present evidence that our results are mainly driven by self-selection and not by school-side selection. As a nal check, we compute the average enrollment elasticity with respect to all school attributes and find that higher elasticities are correlated with higher supply of the attribute, especially in the case of test scores-enrollment elasticities for private schools.

Suggested Citation

  • Francisco Gallego & Andrés Hernando, 2009. "School Choice in Chile: Looking at the Demand Side," Documentos de Trabajo 356, Instituto de Economia. Pontificia Universidad Católica de Chile..
  • Handle: RePEc:ioe:doctra:356
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    File URL: http://www.economia.uc.cl/docs/dt_356.pdf
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    References listed on IDEAS

    as
    1. Francisco Gallego, 2002. "Competencia y Resultados Educativos: Teoría y Evidencia para Chile," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 39(118), pages 309-352.
    2. Kenneth L. Judd, 1998. "Numerical Methods in Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262100711, February.
    3. Kenneth Y. Chay & Patrick J. McEwan & Miguel Urquiola, 2005. "The Central Role of Noise in Evaluating Interventions That Use Test Scores to Rank Schools," American Economic Review, American Economic Association, vol. 95(4), pages 1237-1258, September.
    4. Justine S. Hastings & Jeffrey M. Weinstein, 2007. "No Child Left Behind: Estimating the Impact on Choices and Student Outcomes," NBER Working Papers 13009, National Bureau of Economic Research, Inc.
    5. Steven Berry & James Levinsohn & Ariel Pakes, 2004. "Differentiated Products Demand Systems from a Combination of Micro and Macro Data: The New Car Market," Journal of Political Economy, University of Chicago Press, vol. 112(1), pages 68-105, February.
    6. Hastings, Justine S. & Kane, Thomas J. & Staiger, Douglas O., 2005. "Parental Preferences and School Competition: Evidence from a Public School Choice Program," Working Papers 10, Yale University, Department of Economics.
    7. Daniele Checchi & Tullio Jappelli, 2002. "School choice and quality," Departmental Working Papers 2002-28, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    8. Claudio Sapelli, 2003. "The Chilean Voucher System: Some New Results and Research Challenges," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 40(121), pages 530-538.
    9. Francisco A. Gallego & Andres E. Hernando, 2008. "On the Determinants and Implications of School Choice: Semi-Structural Simulations for Chile," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2008), pages 197-244, August.
    10. Dante Contreras & Paulina Sepúlveda & Sebastián Bustos, 2010. "When Schools Are the Ones that Choose: The Effects of Screening in Chile," Social Science Quarterly, Southwestern Social Science Association, vol. 91(5), pages 1349-1368, December.
    11. Patrick Bayer & Fernando Ferreira & Robert McMillan, 2004. "Tiebout Sorting, Social Multipliers and the Demand for School Quality," NBER Working Papers 10871, National Bureau of Economic Research, Inc.
    12. Tullio Jappelli & Daniele Checchi, 2003. "School Choice and Quality," CSEF Working Papers 91, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 09 Jul 2004.
    13. Chumacero, Romulo & Gómez Caorsi, Daniel & Paredes, Ricardo, 2008. "I would walk 500 miles (if it paid)," MPRA Paper 15125, University Library of Munich, Germany, revised Dec 2008.
    14. Francisco A. Gallego, 2004. "School Choice, Incentives, and Academic Outcomes: Evidence from Chile," Econometric Society 2004 Latin American Meetings 39, Econometric Society.
    15. Chang-Tai Hsieh & Miguel Urquiola, 2002. "When Schools Compete, How Do They Compete? An Assessment of Chile's Nationwide School Voucher Program," Working Papers 123, Princeton University, Department of Economics, Center for Economic Policy Studies..
    16. Patrick Bayer & Robert McMillan, 2005. "Choice and Competition in Local Education Markets," NBER Working Papers 11802, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

    School choice; Chile; vouchers; structural estimates; parental preferences;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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