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Why Do Households Leave School Value Added on the Table? The Roles of Information and Preferences

Resource type
Authors/contributors
Title
Why Do Households Leave School Value Added on the Table? The Roles of Information and Preferences
Abstract
Romanian households could choose schools with one standard deviation worth of additional value added. Why do households leave value added "on the table"? We study two possibilities: (i) information and (ii) preferences for other school traits. In an experiment, we inform randomly selected households about schools' value added. These households choose schools with up to 0.2 standard deviations of additional value added. We then estimate a discrete choice model and show that households have preferences for a variety of school traits. As a result, fully correcting households' beliefs would eliminate at most a quarter of the value added that households leave unexploited.
Publication
American Economic Review
Volume
113
Issue
4
Pages
1049-82
Date
2023-04
Citation
Ainsworth, R., Dehejia, R., Pop-Eleches, C., & Urquiola, M. (2023). Why Do Households Leave School Value Added on the Table? The Roles of Information and Preferences. American Economic Review, 113, 1049–1082.
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