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Heterogeneity in School Value Added and the Private Premium

Author

Listed:
  • Tahir Andrabi
  • Natalie Bau
  • Jishnu Das
  • Asim I. Khwaja

Abstract

We estimate and validate test score–based measures of school quality (school value added, or SVA) in Pakistan. We document substantial variation in SVA within villages and within the public and private sectors, leading to a wide range of possible estimates of the private premium. We also show that parents value SVA. Heterogeneity in parental demand for quality helps explain both the evolution of the market over time and cross-market variation in school quality. The supply side responds to parental demand for quality in the private sector, but there is no evidence it does so in the public sector.

Suggested Citation

  • Tahir Andrabi & Natalie Bau & Jishnu Das & Asim I. Khwaja, 2025. "Heterogeneity in School Value Added and the Private Premium," American Economic Review, American Economic Association, vol. 115(1), pages 147-182, January.
    • Handle: RePEc:aea:aecrev:v:115:y:2025:i:1:p:147-82
    DOI: 10.1257/aer.20221422
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    More about this item

    JEL classification:

    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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