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School Choice and Switching Costs

Author

Listed:
  • Ricardo Paredes
  • Rómulo Chumacero
  • Juan Gallegos

Abstract

The voucher in education firmly relies on the parent´s ability to choose their child´s school. One factor which may reduce this choice is the presence of switching costs, caused by factors such as the stress that children experience and the loss of social networks. We develop a methodology which quantifies the switching costs. We then analyze the existence of these costs in Chile, a country with a more than 90% of the students covered by that system. Using flexible estimation techniques, that consider the existence of structural changes in the probability to change school, we found that switching costs are statistically significant and economically relevant. Statistical Approach, Maximun Likelihood; ProbitSwitching costs are very relevant; parents are limited to change their sons among schools, so changes in educational quality take time to produce effects.

Suggested Citation

  • Ricardo Paredes & Rómulo Chumacero & Juan Gallegos, 2012. "School Choice and Switching Costs," EcoMod2012 3694, EcoMod.
    • Handle: RePEc:ekd:002672:3694
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    File URL: http://ecomod.net/system/files/SwitchingCosts_GCP_complete.docx
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    Cited by:

    1. Rómulo A. Chumacero & Juan Gallegos Mardones & Ricardo D. Paredes, 2016. "Competition Pressures and Academic Performance in Chile," Estudios de Economia, University of Chile, Department of Economics, vol. 43(2 Year 20), pages 217-232, December.

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