Estimation of household spending on education using household surveys

1. Estimation of household spending on education using household surveys Methodological aspects and applications J. Claude ndabananiye Pôle de Dakar

2. Outline • Background and motivations: the critical need for statistics on household spending on education • Estimation of HH expenditure on education • Methodologicalaspects • Data collection • Estimation techniques III. Selected exemples and the way forward

3. I. Background and motivations: the crucial need for statistics on HH education spending (1) • Policy analysis on education financing is often limited to that of public resources because of a lack of data of HH contributions • Weak statistical capacity to regularly conduct surveys on HH household • Lack of standardized and comparable methodology on private spending on education • However, household financing of education is an increasingly important issue in SSA countries • Limited public resources to fund the expansion of education systems • Hence, increasing private financing will be inevitable

4. I. Background and motivations: the crucial need for statistics on HH education spending (2) • In this perspective it is essential to effectively assess: • The extent and nature of household contributions to education. • Public-private cost sharing structure? At what extent do HH contribute at different levels of education? What items do they finance? • At HH level, it is important to assess the magnitude of education spending compared to other items (health, food, etc.). • The relative weight of education funding in total HH spending (by income level, by level of education, by main items, etc.)

5. II. Estimation of HH expenditure on education: A. Methodological aspects What should/has to be considered as HH expenditure on education? 1) Expenditure that are clearly included as HH expenditure: direct expenditure related to attending school • Registration fees (and other associated fees: examination fees, parents’ association fees, etc.) • Uniforms and school supplies (text books, sport clothing, other compulsory supplies) • Ancillary services: boarding fees, canteens and cafeterias, transportation 2) Expenditure ‘not’ included (open to discussion): • additional expenditure not compulsory/ not directly related to attending school

6. Table1. Conceptual framework for classifying HH education spending Source: Pôle de Dakar

7. II. Estimation of HH expenditure on education: B. Data collection Where to find data on HH expenditure on education? 1) Educational institutions accounting books : line items that show payments from households - However, thismayaccount for a relatively small part of total HH expenses 2) HH budget-consumption surveys. Widely available but with many methodological challenges: - Declared information is based on what is reported from memory (potential source of errors and omissions) - Varying understanding of expenditure on education - In many cases: HH expenses on education can not be traced for each enrolled child

8. Estimation of HH expenditure on education:C. Estimation techniques using HH surveys (1) 2 Cases: Case 1)HHeducation spending is reported for each enrolled child and by the main expenditure items (tuition fees, school supplies, uniform, etc.) • In this case, the mean (average) expenditure per child, per education level and per main items are derived as simple averages (takingintoaccountappropriatesamplingprocedure: samplingweights, etc.)

9. Estimation of HH expenditure on education: C. Estimation techniques using HH surveys (2) Case 2) Only the total expenditure on education for all enrolled children in the HH is reported Which estimation approach is appropriate in this case? - Dividing the total HH expenditure by the number of children - Considering sub-populations (hh with only preschool or primary children - Using econometric modeling to estimate mean/average expenditure per child

10. Estimation of HH expenditure on education: C.Estimation techniques using HH surveys (3) • Suppose an education system with five levels of education. • For each HH, total expenditure on education equals the sum of expenditure for all schooled children. Thus, the regression model can be written as : • Refers to an accountingidenditynot a behavioralnor an equilibriumrelationship • (parameters to be estimated): the coefficients associated with the number of schooled children for each education level represent the mean/average cost per child atthatlevel • OLS regression w/o the constantterm (if no schooledchild, HH educspending=0) • The model may then be reproduced by type of institution (public / private), by income quintile, by residence (rural / urban), by gender, etc

11. Estimation of HH expenditure on education: Robustness check • The estimation technique in order to derive statistically significant and population - representative estimates must ensure a number of rules of consistency/robustness: • Average spending per child always positive and highly significant • Respect of sampling weights in order to be able to extrapolate estimated averages to the entire population. • Ensure referential thresholds: Eg. Estimated total (public+private) average expenditure per child must be between the estimated cost in the public school and private school. • Some limitations: • Some HH expenses can benefit from economies of scale, i.e. not proportional to the number of children. • Data are based on retrospective surveying. So, there are potential errors and omissions that need to be taken into account

12. Selected exemples:Average HH education spending by child and education level in 15 SSA countries (2004 USD PPP)

13. Selected exemples:Breakdown of HH educationspending by main items, 15 SSA countries (%)

14. Selected exemples:Cost-sharing between Households and the Government and Distributive Equity issues Household expenditure on education as % of public curret expenditure on education, by level (Average for 15 African countries) Distribution (%) of Enrolled Pupils by Wealth Quintile and Education Level, (Average for 15 African countries)

15. Way forward: Dedicated household spending surveys • Standardized an comparable methodology: clear definitions and boundaries taking into account developing countries’ context • Development of a dedicated questionnaire on HH education spending • Capacity building on data collection and data analysis

16. THANK YOU For more information please visit Www.Poledakar.Org J. Claude ndabananiye jc.ndabananiye@poledakar.org