IDEAS home Printed from https://ideas.repec.org/p/tul/ceqwps/71.html
   My bibliography  Save this paper

The Market Value of Public Education: A Comparison of Three Valuation Methods

Author

Listed:
  • Sergei Soares

    (Center for Global Development)

Abstract

In this paper, I will compare three methods to value education services and their distributive impact. These methods are: the Cost of Provision approach, according to which public schooling is worth what it costs the state to produce it; the Labor Market approach, according to which a year of schooling is worth the present value of the additional lifetime income it brings; and the Private Educational Market approach, according to which a year in a public school is worth what it would cost in an equivalent private school. For each method, I will calculate the total value of public educational services by level as well as their impact upon income inequality, as measured by the Gini Coefficient of per capita household income. I will apply each method to Brazil, a country for which educational, expenditure, and income distribution data are both good quality and easily available. The results are surprisingly invariant across methods: (i) the value of all public schooling varies from 6% to 7% of incomes with the Cost of Provision providing the lowest estimates and the Labor Market Method the highest; and (ii) with the exception of higher education, public schooling is highly distributive and all public educational services reduce the Gini Coefficient by about 3 to 4 Gini points.

Suggested Citation

  • Sergei Soares, 2018. "The Market Value of Public Education: A Comparison of Three Valuation Methods," Commitment to Equity (CEQ) Working Paper Series 71, Tulane University, Department of Economics.
  • Handle: RePEc:tul:ceqwps:71
    as

    Download full text from publisher

    File URL: http://repec.tulane.edu/RePEc/ceq/ceq71.pdf
    File Function: First version, 2018
    Download Restriction: no

    More about this item

    Keywords

    valuation of educational services; value of public education; distributional aspect of public education; hedonic prices; educational rates of return; costs of education;

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tul:ceqwps:71. 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: (Nora Lustig). General contact details of provider: http://edirc.repec.org/data/detulus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.