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American Economic Journal: Applied Economics: Vol. 3 No. 3 (July 2011)

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Do Value-Added Estimates Add Value? Accounting for Learning Dynamics

Article Citation

Andrabi, Tahir, Jishnu Das, Asim Ijaz Khwaja, and Tristan Zajonc. 2011. "Do Value-Added Estimates Add Value? Accounting for Learning Dynamics." American Economic Journal: Applied Economics, 3(3): 29-54.

DOI: 10.1257/app.3.3.29

Abstract

This paper illustrates the central role of persistence in estimating and interpreting value-added models of learning. Using data from Pakistani public and private schools, we apply dynamic panel methods that address three key empirical challenges: imperfect persistence, unobserved heterogeneity, and measurement error. Our estimates suggest that only one-fifth to one-half of learning persists between grades and that private schools increase average achievement by 0.25 standard deviations each year. In contrast, value-added models that assume perfect persistence yield severely downward estimates of the private school effect. Models that ignore unobserved heterogeneity or measurement error produce biased estimates of persistence. (JEL I21, J13, O15)

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Authors

Andrabi, Tahir (Pomona College)
Das, Jishnu (World Bank and Center for Policy Research, New Delhi)
Khwaja, Asim Ijaz (Harvard U)
Zajonc, Tristan (Harvard U)

JEL Classifications

I21: Analysis of Education
J13: Fertility; Family Planning; Child Care; Children; Youth
O15: Economic Development: Human Resources; Human Development; Income Distribution; Migration

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