Education Production Function

1
Education Production Function

• A model

2
Theory

• Output f(inputs)
• What is output?
• Test scores?
• Which scores?
• Graduation rates?
• Multiple outputs?
• Estimation

3
Theory

• Output f(inputs)
• What are the inputs?
• Think of (pure or general) theory
• Capital, labor (human capital), energy, materials
• Think of literature (you have been reading the
  literature, right?)
• student teacher ratio
• teacher salaries
• per pupil expenditures
• socio-demographic characteristics
• other

4
Theory

• Output f(inputs)
• What is f(.)?
• Linear
• non-linear
• no interactions
• interactions

5
Estimation

• Multiple outputs
• separate regressions
• Seemingly unrelated regressions
• cross equation restrictions

6
Estimation - SUR
7
Estimation - SUR

• Cross equation constraints
• F(y, z x1, x2)
• PPF
• MRTSy MRTSx
• implication