CReAM Applied Economics seminar presented by Rebecca Dizon Ross (Chicago Booth)
23 September 2019, 4:00 pm–5:30 pm
Not Playing Favorites: An Experiment on Parental Preferences for Educational Investment (with James Berry and Maulik Jagnani).
Event Information
Open to
- All
Organiser
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Economics Reception
Location
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Ricardo Lecture Theatre107: Drayton House30 Gordon StreetLondonWC1H 0AXUnited Kingdom
How do parents choose to allocate investments across children? Do they maximize the returns to their investments (total household earnings), or equalize across their children because of an aversion to cross-sibling inequality? In this paper, we conduct the first experiment that identifies parents’ preferences for investing in their children’s education. The experiment exogenously varies the short-run returns to educational investments to identify the degree to which parents care about (a) maximizing total household earnings, (b) minimizing cross-sibling inequality in “outcomes” (i.e., child-level earnings), and (c) minimizing cross-sibling inequality in “inputs” (i.e., the investments each child receives). We find that while parents care about both maximizing total household earnings and minimizing inequality in inputs, they place a high value on equality of inputs. Parents choose exactly equal inputs 35% of the time and forego40-50% of their potential experimental earnings due to inequality aversion in inputs. In contrast, we find no evidence that parents are averse to inequality in outcomes.
The link to the paper is: https://faculty.chicagobooth.edu/rebecca.dizon-ross/research/index.html
About the Speaker
Rebecca Dizon Ross
at Chicago Booth
More about Rebecca Dizon RossOther events in this series