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Private Education Market, Information on Test Scores and Tuition Practices

Author

Listed:
  • Firpo, Sergio

    () (Insper, São Paulo)

  • Ponczek, Vladimir

    () (Sao Paulo School of Economics)

  • Possebom, Vítor Augusto

    () (Sao Paulo School of Economics)

Abstract

In this paper, we study the impact of disclosing information about school quality of private schools in Brazil on school choice. Particularly, we investigate whether test score disclosure affected private schools' tuition prices. In 2006, Brazil started to announce the schools' average test score of ENEM, a high school exit exam run by the federal government. Using longitudinal school data, we gauge the effect of test score disclosure on tuitions of private schools for three different schools levels (elementary, middle and high school). We find that the disclosure of schools' average test scores affects tuitions positively for all these three educational levels, but the effect is larger for high school tuitions. We also find that private education markets are local instead of national, since local ranks better predict tuition prices than national ranks. Finally, adjustments on prices did not follow immediately after the publication of scores but occurred gradually over time, revealing that the parents needed some time to trustfully associate results on the exam to new information on school quality.

Suggested Citation

  • Firpo, Sergio & Ponczek, Vladimir & Possebom, Vítor Augusto, 2014. "Private Education Market, Information on Test Scores and Tuition Practices," IZA Discussion Papers 8476, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp8476
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    References listed on IDEAS

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    More about this item

    Keywords

    educational markets; information provision; private schools; tuition practices; school quality;

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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