DEMAND FOR EDUCATION: EVIDENCE FROM A RURAL SCHOOL DISTRICT
There has been much debate in recent years about the quality of local public education in the United States. Much of this discussion has centered around the apparent underperformance of children in basic areas like reading, math, and English as reflected by low scores on standardized achievement exams relative to their international peers and the appropriate level of educational spending. This study examines the question of how much households are willing to pay for improvements in the quality of local public education in a rural school district in Pennsylvania. The study uses the contingent valuation technique to obtain micro-data by personal interview on demand for improved public school quality. Estimates of willingness to pay are computed and logit/Tobit analyses are used to determine what household characteristics are associated with household willingness to pay. The results of this analysis indicate that the majority of respondents value improved public school quality and that residents would pay up to approximately twenty-five percent of educational budgets for a ten percent improvement in school quality as measured by achievement test performance. However, lower income households and those with fewer connections to the local public school are less likely to be supportive of increased expenditures. .
Stair, Anthony, Terance Rephann, and Matt Heberling. 2002. Demand for education: Evidence from a rural school district. Paper to be presented at the 42nd Annual Meeting of the Southern Regional Science Association on April 10-12, 2003 in Louisville, KY.