Much better information to improve service delivery: New evidence

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Countries around the world have got experimented with “school report cards”: giving parents with information about the quality of their particular school so that they can demand higher quality assistance for their children. The results have been blended. Andrabi, Das, and Khwaja bring a significant contribution to that literature in last month’s American Economic Review with their article using data from Pakistan , “Report Cards: The Impact of Providing School and Child Test Ratings on Educational Markets. ”

Here’s the abstract: “We study the impact of providing school report cards with test scores on subsequent test ratings, prices, and enrollment in markets with multiple public and private providers. A randomly selected 1 / 2 of our sample villages (markets) obtained report cards. This increased test scores by 0. 11 standard deviations, decreased private school charges by 17 percent, and increased primary enrollment by 4. 5%. Heterogeneity in the treatment impact by initial school test scores is consistent with canonical models of asymmetric details. Information provision facilitates better reviews across providers, and improves market efficiency and child welfare by means of higher test scores, higher registration, and lower fees. ”

One difference between this study and previous school report cards studies is that this intervention reaches the level of the local education market: It isn’t really at the level of the school or on the level of child, but it’s throughout all schools within a community (and essentially all children attend school within the community). That creates a distinctive opportunity to see the interplay between general public and private schools.

Here are a couple of interesting nuances:

  • The price reduction is driven by high-performing private schools. That seems counterintuitive: Although “parental knowledge improved as a result of the particular intervention” – meaning that “perceptions of faculty quality became better aligned with school test scores” – the prices of private schools with the best test scores actually came lower. Why? This is consistent with what we call a “separating equilibrium, ” where higher quality schools in part signal that quality with big price mark-ups. Better information reduces those mark-ups. The best private schools still charge higher prices – after all, they have the best test scores. They just don’t charge as much as they utilized to.
  • The biggest test score gains (0. 31 standard deviations) come from private schools that were performing poorly at baseline. But additionally, there are gains in public schools (0. 09 standard deviations). Even though public institutions don’t face the same market stresses as private schools, there is a “significant increase in interactions between parents and schools in treatment villages following a distribution of report cards, ” suggesting that parents may be making social pressure on public schools. These test score gains are certainly not driven by children switching educational institutions. “Very few children switched universities in treatment villages. ”

The track record of report credit cards on service delivery has been blended, from resounding successes (in wellness centers in Uganda) to non-results (in schools in India). The unsuccessful program in India offered results at the level of the community, so competition across institutions within the community would be unlikely. Some interventions have focused only on public organizations, relying only on social stress from parents when faced with the information that their school isn’t excellent. As in many classes of surgery, success may be in the details: Knowning that there are better private or public school options in one’s own community might increase social pressure significantly, instead of knowing that some school that is far and inaccessible is better.

Kids and parents are better off as a result of this intervention. Getting information out on the level of the market is a promising avenue.

Bits and pieces

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