Rajeev Dehejia

development and international economics seminar

Rajeev Dehejia

NYU Wagner
Why do households leave school value added “on the table”? The roles of information and preferences
Venue

MEGA

MEGA

Maison de l'économie et de la gestion d'Aix
424 chemin du viaduc
13080 Aix-en-Provence

Date(s)
Thursday, June 23 2022| 1:00pm to 2:15pm
Contact(s)

Timothée Demont: timothee.demont[at]univ-amu.fr
Eva Raiber: eva.raiber[at]univ-amu.fr

Abstract

Administrative data reveal that Romanian households could choose schools with 1 s.d. worth of additional value added. Why do households leave value added “on the table”? We study two possibilities: households may lack information about value added, or they may have preferences for other school traits. First, we elicit households’ beliefs about the value added of the schools in their town. These beliefs explain less than one fifth of the variation in measured value added. We then inform randomly selected households about schools’ value added. This improves the accuracy of their beliefs and leads them to choose higher value added schools. The effect is stronger for low-achieving students and for students not admitted to their top two choices. Finally, we use a discrete choice model to estimate households’ preferences for school attributes (as they perceive them). Households have strong preferences for peer quality and curriculum in addition to value added. Thus, households would not “max out” on value added even under perfect information: this only eliminates one quarter of the value added households leave unexploited.