Catchment Cohort Size Instrument
Estimating the impact of per-student public funding on household expenditure is prone to endogeneity because school enrollment reflects unobserved household educational demand.
Picture this
To measure how school grant size truly affects family spending without getting confused by family choices, researchers look at how many children of school age happen to live in the surrounding area. Since the total grant amount is fixed per school, having more nearby children automatically shrinks the per-child funding without relying on family preferences or behavior.
What the evidence says
The first-stage F-statistic was 23.54 without controls and 10.32 with controls, yielding an IV elasticity estimate of household expenditure to rule-based grants of -0.946 to -1.124 (p < 0.01).
- Who
- 34 remote primary schools (closest neighboring school ≥5km away) matched to 540 households (1,195 children) in rural Zambia.
- How
- Two-stage least squares (2SLS) instrumental variable estimation using the total number of school-age children in five primary catchment villages as an instrument for per-student rule-based grants.
What to do
Use demographic catchment size boundaries as exogenous instruments when estimating per-capita public transfer impacts in fixed-grant administrative settings.
From the source
"We therefore use the size of the eligible cohort in the catchment area as an instrument for school enrollment, and therefore the level of per-student cash grants..."
School Inputs, Household Substitution, and Test Scores