John Singleton from Rochester University will present "Valuing School Choice: Using a Randomized Experiment to Validate Welfare Evaluation of draft School Vouchers", (joint with Peter Arcidiacono, Karthik Muralidharan, Eun-young Shim).
Abstract: In this paper, we use a unique two-stage experiment in rural India that randomized access to school vouchers across both markets and students to estimate the revealed preference welfare valuation of school choice. In the first step of the research design, we develop an empirical model of primary school choice subject to liquidity and credit constraints that is estimated using data from only the control markets. Based on this exercise, we estimate that the school voucher generated welfare value of 8,000 Rs. (over four times the average draft school's annual tuition) on average to the students induced into draft schooling by the program. This magnitude is twice as large as estimates obtained from demand models that ignore ability-to-pay constraints on households' choice. The second step of the research design will validate the estimated welfare impacts by comparing model predictions for a simulated voucher program in control markets with data from the treatment group. The results in this paper are based on the first step (using only control data) and the draft serves as a pre-commitment to the model estimates and predictions before examining the experimental data.