Cheaper by the Dozen: Using Sibling Discounts at Catholic Schools to Estimate the Price Elasticity of Private School Attendance
51 Pages Posted: 26 Oct 2011
There are 2 versions of this paper
Cheaper by the Dozen: Using Sibling Discounts at Catholic Schools to Estimate the Price Elasticity of Private School Attendance
Cheaper by the Dozen: Using Sibling Discounts at Catholic Schools to Estimate the Price Elasticity of Private School Attendance
Date Written: October 1, 2011
Abstract
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 fine set of geographic fixed effects, while still identifying the price parameter. We use data from 3700 Catholic schools, matched to restricted Census data that identifies geography at the block level. 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.
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Rotten Apples: An Investigation of the Prevalence and Predictors of Teacher Cheating
By Brian Jacob and Steven D. Levitt
-
By Paul Glewwe, Nauman Ilias, ...
-
By Brian Jacob
-
Winning Isn't Everything: Corruption in Sumo Wrestling
By Mark Duggan and Steven D. Levitt
-
The Market for Teacher Quality
By Eric A. Hanushek, John F. Kain, ...
-
Food for Thought: The Effects of School Accountability Plans on School Nutrition
By David N. Figlio and Joshua Winicki
-
The Central Role of Noise in Evaluating Interventions that Use Test Scores to Rank Schools
By Kenneth Y. Chay, Patrick J. Mcewan, ...
-
Does School Accountability Lead to Improved Student Performance?