Using schooling decisions to estimate the elasticity of marginal utility of consumption

Katy Bergstrom and William Dodds

Journal of Public Economics, 2023, vol. 224, issue C

Abstract: This paper uses schooling decisions to estimate curvature in utility of consumption in developing countries. We show that the elasticity of marginal utility of consumption (EMUC) can be recovered from three sufficient statistics: (1) the price effect of schooling; (2) the income effect of schooling; and (3) the consumption cost of sending a child to school. We estimate the consumption cost of schooling using variation from the randomized roll-out of Progresa, a conditional cash transfer program in rural Mexico. Using estimates of income and price effects in the Progresa setting from Bergstrom and Dodds (2021), we estimate the EMUC at 1.6.

Keywords: Elasticity of marginal utility of consumption; Sufficient statistics; Consumption cost of schooling; Income effect; Price effect (search for similar items in EconPapers)
JEL-codes: D01 D60 H00 I31 O12 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0047272723001305
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:224:y:2023:i:c:s0047272723001305

DOI: 10.1016/j.jpubeco.2023.104948

Access Statistics for this article

Journal of Public Economics is currently edited by R. Boadway and J. Poterba

More articles in Journal of Public Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().