Evaluation of the Factor Affecting on Education Expenditure (Tobit Model Approach)

One of the main goals of many households is to improve the quality of their children by increasing their education expenditure. This study investigates the factors affecting on education expenditure as measure of quality of children by using the Households’ Income and Expenditure survey dataset over 2010-2014 and utilizing Tobit  models. The result of Tobit shows that with addition of one person to the number of children, amount of education expenses per child reduces about 0.0064 billion Rial. But the effect of increasing one unit in the years of education of the head and mother of the household increases the educational expenditures by as much as 0.038 and 0.0548 billion Rial respectively. Therefore Becker’s theory of child quality-quantity tradeoff is confirmed, so the household has tendency increase educational expenditure per child and improve the quality of child by decreasing the number of children. Therefore, given the increasing quality of children, the development of production infrastructure for employing high-quality labor is an important step in increasing labor productivity and economic development in macro-level.