A dynamic model of elementary school choice

Abstract

This paper builds and estimates a dynamic model of elementary school choice using detailed Chilean administrative data. In the model, parents care about different features of primary schools: school’s socioeconomic composition, quality (measured as the school’s contribution to standardized test scores), religiosity, location, type of administration, tuition fee and GPA standard. Parents are heterogeneous in two dimensions: whether they have the skills needed to understand public information about quality (standardized tests), and their involvement in their child’s school. The results suggest that: (1) Parents care about school quality, but to a moderate degree. (2) Parents have an important misperception about school quality, which results in a less favorable opinion about the quality of public schools, relative to private schools. (3) If parents were only concerned about quality, they would choose public schools more often. (4) Admission restrictions play a relevant role; otherwise, parents would choose private school more frequently