The Impact of Private School Tuition on Education Choice

When it comes to education, families have a variety of options to choose from. Public and private schools are two of the most popular choices, but what factors influence a family's decision to send their children to private school? To answer this question, researchers have studied the demand price elasticity for public education, which is -1.72, and the income elasticity of 0.31. It has been found that public and private schools are substitutes, with a cross-price elasticity of 0.32. A decrease in the standard deviation in tuition prices increases the likelihood that a family will send their children to private school by half a percentage point, which translates into an elasticity of Catholic school attendance with respect to tuition costs of -0.19. Many Catholic elementary schools offer discounts to families who enroll more than one child in school in a given year. It has been observed that demand for private education is inversely related to private school rates, as well as to the quality of state education in the local area at the time when families were making key education choice decisions at the ages of 7, 11 and 13. At age 11, an increase of a standard deviation in the quality of state schools reduces participation in private schools by 0.31 percentage points, equivalent to an elasticity of -0.21. The effect of vouchers on the classification between private and public schools depends on the price elasticity of demand for private education. At age 11 and 13, an increase in the quality of local state high school reduces the likelihood of attending private schools.

Researchers have analyzed this variation using data on more than 3,700 school enrollment schedules collected from Catholic schools across the country, compared to restricted census data that identifies the precise location that can be compared to the nearest Catholic school.

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