include: (i) to better target public educational services;<sup>(ii) charge a fee for public educational</sup> services to the non-poor; and (iii) increase the quality<sup>of educational services for the poor.</sup>

**Table 8. Effect " of public schools provision**<sup>**on household education spending by poverty status'2**</sup>

||Extreme|Moderate|Non Poor|
|---|---|---|---|
|MMWPv|2114.63|2963.22|7229.76|
|MMWPu|849.23|1241.22|1073.99|
|Effect|1265.40|1722.00|6155.77|

_Source:_ Own calculation based on ENIGH<sup>96</sup> 1/ Annual 1996 pesos As follows from table 6 in appendix 2,<sup>at the primary level, all explanatory variables turned</sup> are significant for explaining the _MMWPu._<sup>In lower secondary level, the variables household per</sup> capita income, region, number of rooms,<sup>type of floor and number of children are important in the</sup> determination of the _MMWPu._ While for upper<sup>secondary instruction, household per capita</sup> income and age are relevant. Interestingly,<sup>household per capita income is also a significant</sup> variable in explaining _MMWPv_ (see table<sup>7 in appendix 2). This suggests that parent's valuation</sup> for private educational services relies solely on income<sup>while for public educational services there</sup> are other important factors in addition to income<sup>that determines</sup><sup>_MMWPu._</sup> In table 9, the effect of government provision<sup>of school services is very similar for both</sup> primary and lower secondary schooling level<sup>(basic education).13This effect is higher in basic</sup> education as compared to upper secondary<sup>or technical education. Assuming that the quality</sup> difference between private and public schools<sup>is only 10% for all levels of education, relative</sup> payments and unforeseen expenses ("savings")<sup>will be much higher in basic school as compared</sup> to upper secondary level. For primary through<sup>upper secondary level, there is a positive</sup> decreasing relationship between the payments<sup>difference (in private versus public schools) and</sup> instruction level. Allowing such difference<sup>to be a proxy for quality, then, the quality difference</sup> between private and public schools in primary<sup>level is 70%, in lower secondary is 60% and in</sup> upper secondary is 50%. This indicates that<sup>quality differences are higher in primary level. The</sup> remaining savings are due to payments and provisions.

**Table 9. Effect" of public schools provision**<sup>**on household education spending by educational level**</sup>

||**Pre**|**Primary**|**Lower**|**Upper**|**Technical**|
|---|---|---|---|---|---|
||**Primary**||**Secondary**|**Secondary**|**Education**|
|MMWPv|5856.12|6920.00|8024.88|7156.88|3688.08|
|MMWPu|880.36|714.68|1725.68|2541.96|2539.2|
|Effect|4975.76|6205.32|6299.2|4614.92|1148.88|

_Source:_ Own calculation based on<sup>ENIGH 96</sup> 1/ Annual 1996 pesos In addition to Least Squares Regression<sup>(LSR), quantile regressions'4were computed to test</sup> for robustness of the above results. The aim is<sup>to assess how large these "savings" are for various</sup> educational expenditure groups. Results of this<sup>test indicate that the distribution of "savings"</sup> might be right-skewed since the _MAfWPu,_<sup>_MMWPv_and the savings effect, evaluated at the</sup> median of the total educational expenditure<sup>distribution, are lower than in the LSR. Note that at</sup> the median of the public educational expenditures<sup>distribution all explanatory variables are</sup> significant for explaining _MMWPu_ (see table<sup>8 in appendix 2). Yet, at the tails of this distribution,</sup> variables such as gender, number of children<sup>and schooling of the household head are not</sup> significant in explaining _MMWPu._

> 12 If we assume that the income distribution for<sup>the extreme poor is uniform, therefore an average poor household will</sup> get $9510.00 annual 1996 pesos (it is assumed that<sup>the household average size is 5 and that the poverty extreme line is</sup> $317.00 monthly per capita 1996 pesos).

> 3 The analysis was not performed for the tertiary<sup>level because the "trigger variable" was not available at that level of education.</sup> **4** See appendix 3 for a brief review of the quantile<sup>regression technique.</sup>

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