Table 5. Probit **on Private School Attendance**

|**Explanatory**|**Coefficient**||**Marginal**|
|---|---|---|---|
|**Variable**|||**Effect**|
|Per capita income|0.78|*|0.064|
|Years of schooling of head|0.03|*|0.002|
|Area_(rural)_|0.80|*|0.046 +|
|Age|0.16|*|0.014|
|Age squared|0.00|*|0.000|
|Gender_(female)_|-0.12|**|-0.010 +|
|Number of rooms|0.09|*|0.008|
|Floor_(notfinishedfloor)_|0.40|*|0.037 +|
|Sewage_(notsewage)_|0.32|*|0.024 +|
|Number of Children|-0.10|*|-0.008|
|Trigger Variable|-0.09|*|-0.008|
|Constant|-7.56|*||

_Source:_ Own calculations based on ENIGH 96 and DGPyP, SEP

* Significant at 5%

** Significant at **10%o** _Italics_ indicates the reference category for dichotomous variables

_(+)_ dF/dx stands for the discrete change in the dummy variable from 0 to I The first column on table 5 has the coefficient and the second shows the marginal effects as estimated from the probit.<sup>7</sup> Notice that all explanatory variables are significant at 5% level, except for gender. In addition, all explanatory variables show the expected sign on the probability to attend private school. For instance, the probability to attend private school is positively influenced by per capita household income and area.

The household's willingness to pay for private education (Pv) of child i (step 2) in Heckman's methodology is estimated using total educational expenditures on private schools (fees, tuition, unforeseen expenses and school materials<sup>8</sup> ) as dependent variable.<sup>9</sup> Explanatory variables are Mills' ratio and the variables from the probit estimation except the trigger variablelo.

Using the estimates from step 2 and step 3 and the mean of all explanatory variables, one can compute the amount of money that households would be willing to pay for the child's private education _(AMVWPv,_ step 4) or public education _(MM_ WPu, step 5). Notice that the difference between _MMWPv_ and _AMWPu_ measure the effect of the government provision of public schools on the education spending behavior of an average household. Note that this difference reflects the relative quality and payments (fees and unforeseen expenses) associated with public and private schools.

Next, how large household "savings" is computed for different population subgroups by area, poverty status, educational level and total educational expenditures by quantile.

Tables I through 9 in appendix 2 show the average values of the explanatory variables for the different population subgroups. Beforesaid, these values are used to compute the marginal willingness to pay corrected for self-selection bias." As indicated on table I in appendix 2, all the explanatory variables turned are significant in the process of computing the marginal willingness to pay for public educational service except for gender. In the case of private education, the relevant variables are income, years of schooling of the head of the household and sewage.

> ' The marginal effect for continuous variables is the marginal effect as evaluated at the mean of the particular exogenous variable, Dichotomous variables have been coded as 'O' or '1', and the marginal effect for such variables represents the impact of the probability of having a I' value for the exogenous variable, as compared to a 'O' value, the other variables being held constant at their mean values.

> s Included only those students with positive fees, tuition and unforeseen expenses.

> 9 Step 3 uses public educational expenditures instead of private ones.

> '° See appendix 2.

> 1 l Note that it is not possible to compare directly actual average payments with the marginal willingness to pay since the later controls for observed factors.

6