The Demand for Educational Quality: Comparing Estimates from a Median Voter Model with Those from an Almost Ideal Demand System

23 Pages Posted: 22 Nov 2005

See all articles by David M. Brasington

David M. Brasington

University of Cincinnati - Department of Economics

Donald R. Haurin

Ohio State University (OSU) - Economics

Date Written: October 13, 2005

Abstract

Communities differ in both the bundle of amenities offered to residents and the implicit price of these amenities. Thus, households are faced with a choice of which bundle to select when they select their residence. This choice implies households make tradeoffs among the amenities; that is, the amenities are substitutes or complements. We focus on estimating the demand for public school quality. After generating the implicit prices of community amenities from a hedonic house price equation, we use the median voter model and the AIDS model framework for estimating price and income elasticities of demand. The two models yield very similar estimates. The own price elasticity of demand for schooling is about -0.6 with an income elasticity of demand of 0.5. Public safety and school quality are substitutes as are the community's income level and school quality.

Keywords: local public goods, almost ideal demand system, school quality, median voter

JEL Classification: C31,H40,R22

Suggested Citation

Brasington, David M. and Haurin, Donald R., The Demand for Educational Quality: Comparing Estimates from a Median Voter Model with Those from an Almost Ideal Demand System (October 13, 2005). Available at SSRN: https://ssrn.com/abstract=851309 or http://dx.doi.org/10.2139/ssrn.851309

David M. Brasington (Contact Author)

University of Cincinnati - Department of Economics ( email )

Carl H. Lindner Hall 2925 Campus Green Drive
PO Box 0371
Cincinnati, OH 45221-0211
United States

Donald R. Haurin

Ohio State University (OSU) - Economics ( email )

154 N. Oval Mall
1010G Derby Hall
Columbus, OH 43210-1172
United States
614-292-0482 (Phone)
614-292-9530 (Fax)

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