Cheaper By the Dozen: Using Sibling Discounts at Catholic Schools to Estimate the Price Elasticity of Private School Attendance
The effect of vouchers on sorting between private and public schools depends upon the price elasticity of demand for private schooling. Estimating this elasticity is empirically challenging because prices and quantities are jointly determined in the market for private schooling. We exploit a unique and previously undocumented source of variation in private school tuition to estimate this key parameter. A majority of Catholic elementary schools offer discounts to families that enroll more than one child in the school in a given year. Catholic school tuition costs therefore depend upon the interaction of the number and spacing of a family's children with the pricing policies of the local school. This within-neighborhood variation in tuition prices allows us to control for unobserved determinants of demand with a set fine geographic group fixed effects while still identifying the price parameter. We analyze this variation by using data on over 3700 school tuition schedules collected from Catholic schools around the nation, matched to restricted Census data that identifies precise location that can be matched to the nearest Catholic school. We find that a standard deviation decrease in tuition prices increases the probability that a family will send its children to private school by one half percentage point, which translates into an elasticity of Catholic school attendance with respect to tuition costs of -0.19. Our subgroup results suggest that a voucher program would disproportionately induce into private schools those who, along observable dimensions, are unlike those who currently attend private school.
|Date of creation:||Oct 2009|
|Date of revision:|
|Note:||CH ED PE|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lankford, Hamilton & Wyckoff, James, 2001. "Who Would Be Left Behind by Enhanced Private School Choice?," Journal of Urban Economics, Elsevier, vol. 50(2), pages 288-312, September.
- Buddin, Richard J. & Cordes, Joseph J. & Kirby, Sheila Nataraj, 1998. "School Choice in California: Who Chooses Private Schools?," Journal of Urban Economics, Elsevier, vol. 44(1), pages 110-134, July.
- Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2005. "An Evaluation of Instrumental Variable Strategies for Estimating the Effects of Catholic Schooling," Journal of Human Resources, University of Wisconsin Press, vol. 40(4), pages 791-821.
- Thomas J. Kane & Stephanie K. Riegg & Douglas O. Staiger, 2006. "School Quality, Neighborhoods, and Housing Prices," American Law and Economics Review, Oxford University Press, vol. 8(2), pages 183-212.
- Stiglitz, J. E., 1974. "The demand for education in public and private school systems," Journal of Public Economics, Elsevier, vol. 3(4), pages 349-385, November.
- Downes, Thomas A & Greenstein, Shane M, 2002. "Entry into the Schooling Market: How Is the Behaviour of Private Suppliers Influenced by Public Sector Decisions?," Bulletin of Economic Research, Wiley Blackwell, vol. 54(4), pages 341-71, October.
- Thomas A. Downes & Shane M. Greenstein, 1996. "Understanding the Supply Decisions of Nonprofits: Modelling the Location of Private Schools," RAND Journal of Economics, The RAND Corporation, vol. 27(2), pages 365-390, Summer.
- Downes, Thomas A. & Zabel, Jeffrey E., 2002. "The impact of school characteristics on house prices: Chicago 1987-1991," Journal of Urban Economics, Elsevier, vol. 52(1), pages 1-25, July.
- repec:mpr:mprres:3180 is not listed on IDEAS
- Lankford, Hamilton & Wyckoff, James, 1992. "Primary and secondary school choice among public and religious alternatives," Economics of Education Review, Elsevier, vol. 11(4), pages 317-337, December.
- Gruber, Jonathan, 2004. "Pay or pray? The impact of charitable subsidies on religious attendance," Journal of Public Economics, Elsevier, vol. 88(12), pages 2635-2655, December.
- Cecilia Elena Rouse, 1998. "Private School Vouchers and Student Achievement: An Evaluation of the Milwaukee Parental Choice Program," The Quarterly Journal of Economics, Oxford University Press, vol. 113(2), pages 553-602.
- David N. Figlio & Cecilia Rouse, 2005.
"Do Accountability and Voucher Threats Improve Low-Performing Schools?,"
NBER Working Papers
11597, National Bureau of Economic Research, Inc.
- Figlio, David N. & Rouse, Cecilia Elena, 2006. "Do accountability and voucher threats improve low-performing schools?," Journal of Public Economics, Elsevier, vol. 90(1-2), pages 239-255, January.
- Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
- Imbens, Guido W & Angrist, Joshua D, 1994.
"Identification and Estimation of Local Average Treatment Effects,"
Econometric Society, vol. 62(2), pages 467-75, March.
- Joshua D. Angrist & Guido W. Imbens, 1995. "Identification and Estimation of Local Average Treatment Effects," NBER Technical Working Papers 0118, National Bureau of Economic Research, Inc.
- Gruber Jonathan H, 2005. "Religious Market Structure, Religious Participation, and Outcomes: Is Religion Good for You?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-32, September.
- Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2005.
"Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools,"
Journal of Political Economy,
University of Chicago Press, vol. 113(1), pages 151-184, February.
- Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2000. "Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools," NBER Working Papers 7831, National Bureau of Economic Research, Inc.
- Jonathan Gruber, 2005. "Religious Market Structure, Religious Participation, and Outcomes: Is Religion Good for You?," NBER Working Papers 11377, National Bureau of Economic Research, Inc.
- Daniel P. Mayer & Paul E. Peterson & David E. Myers & Christina Clark Tuttle & William G. Howell, 2002. "School Choice in New York City After Three Years: An Evaluation of the School Choice Scholarships Program," Mathematica Policy Research Reports bd29adb569094778a5981be0e, Mathematica Policy Research.
- Peltzman, Sam, 1973. "The Effect of Government Subsidies-in-Kind on Private Expenditures: The Case of Higher Education," Journal of Political Economy, University of Chicago Press, vol. 81(1), pages 1-27, Jan.-Feb..
- Figlio, David N. & Stone, Joe A., 2001. "Can Public Policy Affect Private School Cream Skimming?," Journal of Urban Economics, Elsevier, vol. 49(2), pages 240-266, March.
- Keeler, Andrew G. & Kriesel, Warren, 1994. "School Choice In Rural Georgia: An Empirical Analysis," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 26(02), December.
- William G. Howell & Patrick J. Wolf & David E. Campbell & Paul E. Peterson, 2002. "School vouchers and academic performance: results from three randomized field trials," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 21(2), pages 191-217.
- Oates, Wallace E, 1969. "The Effects of Property Taxes and Local Public Spending on Property Values: An Empirical Study of Tax Capitalization and the Tiebout Hypothesis," Journal of Political Economy, University of Chicago Press, vol. 77(6), pages 957-71, Nov./Dec..
- Jonathan Gruber, 2004. "Pay or Pray? The Impact of Charitable Subsidies on Religious Attendance," NBER Working Papers 10374, National Bureau of Economic Research, Inc.
- Derek Neal, 2002. "How Vouchers Could Change the Market for Education," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 25-44, Fall.
- Dennis Epple & Richard Romano, 2008.
"Educational Vouchers And Cream Skimming,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1395-1435, November.
- Neal, Derek, 1997. "The Effects of Catholic Secondary Schooling on Educational Achievement," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 98-123, January.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:15461. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.