Coleção Insper Business and Economics Working Papers
URI permanente para esta coleçãohttps://repositorio.insper.edu.br/handle/11224/5740
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Working Paper Entry in School Markets: Theory and Evidence from Brazilian Municipalities(2012) NAERCIO AQUINO MENEZES FILHO; Moita, Rodrigo Menon Simões; Andrade, Eduardo de CarvalhoThis paper develops a theoretical model of private school entry and estimates it using data from Brazilian municipalities. The school market is different from other markets because students are both consumers and inputs in the production fuction of education. There is a benefit to study among good peers. The theoretical model predicts a segregated equilib rium where the better students attend the private schools, rendering these with a better (endogenous) quality than the public ones. Hence, a private institution only needs to attract the best local students to be better than the existing public schools. The model’s main prediction is that educa tional inequality induces entry. We use a panel data of private school entry in Brazilian municipalities between 1995 and 2000 to estimate an entry model. The econometric results confirm the main theoretical find ing: education inequality has a positive effect on entry. A higher degree of inequality increases the private schools’ ability to cream skim the best students. We also observe a decrease in the quality of the public schools, as measured by math and reading test scores, when a private school enters a town.Working Paper Permanent Excess Demand as Business Strategy: An Analysis of the Brazilian Higher-Education Market(2011) Andrade, Eduardo de Carvalho; Moita, Rodrigo Menon Simões; Silva, Carlos Eduardo Lobo eMany Higher Education Institutions (HEIs) establish tuition below the equilibrium price to generate permanent excess demand. This paper first adapts Becker’s (1991) theory to understand why the HEIs price in this way. The fact that students are both consumers and inputs on the education production function gives rise to a market equilibrium, where some firms have excess demand and charge high prices, and others charge low prices and have empty seats. Second, the paper analyzes this equilibrium empirically. We estimate the demand for undergraduate courses in business administration in the state of São Paulo, and show that the quality of the student body is important on the students’ decisions of where to study. The results show that tuition, quality of incoming students and percentage of professors with doctorates are the determining factors of students’ choice. Since student quality determines the demand for a HEI, we calculate how much the HEIs value having better students; that is the total revenue that each HEI gives up to guarantee excess demand. Regarding the “investment” in selectivity, 39 HEIs in São Paulo give up a combined 5 million Reais (or US$ 3.14 million) in revenue per year per freshman class, which means 7.6% of the revenue coming from a freshman class.Working Paper Technical Efficiency of Business Administration courses – a simultaneous analysis using DEA and SFA(2010) Miranda, Rodrigo Oliveira de; Gramani, Maria Cristina Nogueira; Andrade, Eduardo de CarvalhoTechnical efficiency of higher education has been mostly studied by the methods Data Envelopment Analysis and Stochastic Frontier Analysis. However, usually papers either compare the efficiency between public institutions or between departments and in both cases, using variables that reflect the teaching and the research with the same importance. In this paper the two methodologies are applied to measure the efficiency of the Business Administration courses in private for-profit institutions, focused just on education and located in the same geographical region. Variables were selected to cover the specific aspects of these courses and the results showed the complementarities of these two approaches.Working Paper Factors Affecting the Student Evaluation of Teaching Scores: Evidence from Panel Data Estimation(2009) Andrade, Eduardo de Carvalho; Rocha, BrunoWe use a large panel data, covering 6 semesters, 496 undergraduate courses related to 101 instructors and 89 disciplines. This allows treating adequately unobserved heterogeneity. We use a random-effects model estimated with feasible generalized least squares to find the factors that affect the student evaluation of teaching (SET) scores, including time-invariant instructors’ characteristics. Our empirical findings are: (i) controlling for the instructor’s status as full-time or part-time professor, the quality of his research affects positively the SET score; (ii) participating in training programs, designed to improve the quality of teaching, did not increase the SET scores; (iii) instructors can ‘buy’ a better evaluation by inflating students’ grade; (ii) the class size affects negatively the SET score; (iv) instructors with more experience are better evaluated, but these gains reduce over time. Finally, there are no significant changes in the rankings overall when we adjust the SET score to eliminate either the possible manipulation by the instructor or the effects of variables beyond his control. Despite some dramatic changes in some instructors’ positions, they are not statistically significant.Working Paper Peer Effect and Competition in Higher Education(2009) Andrade, Eduardo de Carvalho; Moita, Rodrigo Menon Simões; Silva, Carlos E. L.This paper analyzes the role of peer effect in the market for higher education. Peer effect is a key variable to understand why higher education institutions set tuition in a way to maintain permanent excess demand. We use data on undergraduate business courses in Brazil to estimate a discrete choice model of demand. The results show a strong impact of peer effect on students’ choice of school. We calculate the tuition increase that would eliminate the excess demand. The results show that the upper limit of the total investment in peer effect is equal to US$ 770 thousands per month for the freshmen year, or 5.13% of the current revenues.