|Table 6. Effect of public schools provision on an|average household education spending|
|---|---|
|MMWPv|6274.88|
|MMWPu|1080.92|
|Effect or "savings'|5193.96|
|_Source:_Own calculation<br>based on ENIGH 96<br>1/ Annual 1996 pesos||

Assuming that there are no differences in the quality of education between a public and a private school, it is seen in table 6 (after controlling for observed and unobserved factors) that family's savings from sending a child to a public school amount to approximately $5,000 pesos per year (0.56 minimum wages in 1996). In addition, the results suggest that such savings are correlated with the schooling of the household head, location and number of children at home.

Now, assuming that the difference between private and public schools students' scores is only 10%, then, ninety percent of the effect or "savings" is due to relative payments and unforeseen expenses. The rest will reflect the amount that the average child would have to pay for "quality difference" in moving from a public to a private school.

The marginal willingness to pay desegregated by area is shown on table 7. Supposing that the quality between public and private schools in both rural and urban areas is the same, then, it turns out that the government provision of public schools is higher in urban areas than in rural areas. This result could be explained among other things, by the following factors: (i) poor location of public educational services; (ii) distance that an individual has to travel to the nearest school; (iii) the population dispersion and lastly the opportunity cost of the children in rural areas.

On the other hand, assuming that there is not a quality difference between private-public schools in rural areas and the quality difference between public-private schools in urban areas is a little above 50%, the relative payments and unforeseen expenses would be the same in both areas. Finally, assuming that the quality difference between public and private rural schools is zero but the quality difference in urban areas is 10%, then the relative payments and unforeseen expenses (as part of the "effect") in urban areas is higher than in rural areas (urban effect $4,016 pesos and rural effect $2,245 pesos). In summary, such scenarios suggest that students in urban areas get a larger share of the subsidy or "savings" from the government provision of educational services compared to these in rural areas.

**Table** 7. **Effect**<sup>**11**</sup> **of public schools provision on household education spending by area**

||**Urban**|**Rural**|
|---|---|---|
|MMWPv|6459|2674|
|MMWPu|1438|429|
|Effect|5021|2245|

_Source:_ Own calculation based on ENIGH 96 1/ Annual 1996 pesos As shown on table 8, the government provision to public schools has a smaller impact on the poor as compared to the non-poor. Notice on table 4 in appendix 2, that for both poor and nonpoor, gender is not important in the determination of the _MMWPu,_ while per capita household income, age, and number of children do have an impact. It is important to note that while the education of the household head determines the _MMWPu_ for the poor, it does not affect it for the non-poor. With respect to _AMWPv_ for poverty status, table 5 in appendix 2 shows that the educational level of the household head affects the _MMWPv_ for both groups, while the per capita household income does affect the non-poor. The age of the children impacts on the _AMWPv_ of the poor, but it does not have any effect on the non-poor. Finally, again gender is not important in the _MMWPv_ for the poor as well as the non-poor.

The analysis by poor/non-poor and region suggests the following: i) the non-poor and those in urban areas get a large share of the subsidy or "savings" from the government provision of education services; and ii) the valuation for private educational services is higher for the wealthy as compared to for the poor. In light of these results, plausible alternatives for the government 7