Private Education Market, Information on Test Scores and Tuition Practices

29 Pages Posted: 4 Oct 2014

See all articles by Sergio Firpo

Sergio Firpo

Insper

Vladimir P. Ponczek

Getulio Vargas Foundation (FGV) - Sao Paulo School of Economics

Vítor Possebom

Yale University

Abstract

In this paper, we study the impact of disclosing information about school quality of private schools in Brazil on school choice. Particularly, we investigate whether test score disclosure affected private schools' tuition prices. In 2006, Brazil started to announce the schools' average test score of ENEM, a high school exit exam run by the federal government. Using longitudinal school data, we gauge the effect of test score disclosure on tuitions of private schools for three different schools levels (elementary, middle and high school). We find that the disclosure of schools' average test scores affects tuitions positively for all these three educational levels, but the effect is larger for high school tuitions. We also find that private education markets are local instead of national, since local ranks better predict tuition prices than national ranks. Finally, adjustments on prices did not follow immediately after the publication of scores but occurred gradually over time, revealing that the parents needed some time to trustfully associate results on the exam to new information on school quality.

Keywords: educational markets, information provision, private schools, tuition practices, school quality

JEL Classification: O12, I21, L15, D82

Suggested Citation

Firpo, Sergio and Ponczek, Vladimir P. and Possebom, Vítor, Private Education Market, Information on Test Scores and Tuition Practices. IZA Discussion Paper No. 8476. Available at SSRN: https://ssrn.com/abstract=2505338

Sergio Firpo (Contact Author)

Insper ( email )

R Quata 300
Sao Paulo, 04542-030
Brazil

HOME PAGE: http://https://sites.google.com/site/sergiopfirpo/

Vladimir P. Ponczek

Getulio Vargas Foundation (FGV) - Sao Paulo School of Economics ( email )

Vítor Possebom

Yale University ( email )

28 Hillhouse Ave
New Haven, CT 06520-8268
United States

HOME PAGE: http://https://www.sites.google.com/site/vitorapossebom/

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