ESTIMATING DEMAND FOR EDUCATION USING THE CHOICE, CONSUMPTION AND INVESTMENT THEORY INTEGRATION METHOD

Nhat Hoa Truong

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Abstract

This study integrates choice theory and consumption-investment theory as the basis for constructing demand for higher education to explain in a different way from the explanation of the demand for higher education built from consumption - investment theory or integration of consumption and investment theory as to why consumers choose to go to one university over another or get a job or an apprenticeship. Using this theory of integration, we have derived the demand for higher education in logit form (probit form) and use VHLSS data in 2018 to estimate the empirical model. The results support the integrated model and show that the social and economic status of the household affects the probability of a household’s demand for higher education. In particular, the coefficient of the variable expressing the expectation is positive and shows high statistical significance. Thus, this variable is shown to be an important decision variable for households to decide to send their children to higher education.

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References

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