Economics, Catholic Schools, and vouchers

Cheaper By the Dozen: Using Sibling Discounts at Catholic Schools to Estimate the Price Elasticity of Private School Attendance
Susan Dynarski, Jonathan Gruber, Danielle Li
NBER Working Paper No. 15461*

We find that a standard deviation decrease in tuition prices increases the probability that a family
will send its children to private school by over two thirds of a percentage point. This translates into an
elasticity of Catholic school attendance with respect to tuition costs of -0.19. This average effect masks
substantial heterogeneity in the response to price, with lower income families and those with less
educated parents being more price sensitive. These results strongly reject the assumption made in
previous studies (e.g., Figlio and Stone, 2001; Lankford and Wyckoff, 2001) that the students that
vouchers would induce into private school would look demographically similar to current private school
students.

http://www.nber.org/papers/w15461.pdf

[uploaded copy]

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