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  3. American Economic Review
  4. January 2025
  5. Heterogeneity in School Value Added and the Private Premium

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Heterogeneity in School Value Added and the Private Premium

  • Tahir Andrabi
  • Natalie Bau
  • Jishnu Das
  • Asim I. Khwaja
American Economic Review
vol. 115, no. 1, January 2025
(pp. 147–82)
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Abstract

We estimate and validate test score–based measures of school quality (school value added, or SVA) in Pakistan. We document substantial variation in SVA within villages and within the public and private sectors, leading to a wide range of possible estimates of the private premium. We also show that parents value SVA. Heterogeneity in parental demand for quality helps explain both the evolution of the market over time and cross-market variation in school quality. The supply side responds to parental demand for quality in the private sector, but there is no evidence it does so in the public sector.

Citation

Andrabi, Tahir, Natalie Bau, Jishnu Das, and Asim I. Khwaja. 2025. "Heterogeneity in School Value Added and the Private Premium." American Economic Review, 115 (1): 147–82. DOI: 10.1257/aer.20221422

Additional Materials

JEL Classification

  • H44 Publicly Provided Goods: Mixed Markets
  • I21 Analysis of Education
  • I26 Returns to Education
  • I28 Education: Government Policy
  • O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration