This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

Why Do Households Leave School Value Added on the Table? The Roles of Information and Preferences

  • Robert Ainsworth
  • Rajeev Dehejia
  • Cristian Pop-Eleches
  • Miguel Urquiola
American Economic Review
vol. 113, no. 4, April 2023
(pp. 1049-82)
Download Full Text PDF

Abstract

Romanian households could choose schools with one standard deviation worth of additional value added. Why do households leave value added "on the table"? We study two possibilities: (i) information and (ii) preferences for other school traits. In an experiment, we inform randomly selected households about schools' value added. These households choose schools with up to 0.2 standard deviations of additional value added. We then estimate a discrete choice model and show that households have preferences for a variety of school traits. As a result, fully correcting households' beliefs would eliminate at most a quarter of the value added that households leave unexploited.

Citation

Ainsworth, Robert, Rajeev Dehejia, Cristian Pop-Eleches, and Miguel Urquiola. 2023. "Why Do Households Leave School Value Added on the Table? The Roles of Information and Preferences." American Economic Review, 113 (4): 1049-82. DOI: 10.1257/aer.20210949

Additional Materials

JEL Classification

  • D12 Consumer Economics: Empirical Analysis
  • D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
  • I21 Analysis of Education
  • I28 Education: Government Policy