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Parents’ Decision-Making on the Consumption of Private Tutoring of Private and Charter School Going Children: A Game Theoretic Approach Dr. Sakib Mahmud.

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Presentation on theme: "Parents’ Decision-Making on the Consumption of Private Tutoring of Private and Charter School Going Children: A Game Theoretic Approach Dr. Sakib Mahmud."— Presentation transcript:

1 Parents’ Decision-Making on the Consumption of Private Tutoring of Private and Charter School Going Children: A Game Theoretic Approach Dr. Sakib Mahmud UW-Superior Dr. Tanzeem Ali Center for Astronomy and Physics Education Research CAPER, USA

2 Private Tutoring How it is defined? “Private tutoring covers tutoring in academic subjects by tutors for financial gains and in addition to the provision of mainstream schooling” (Bray, 2003) “Private tutoring (PT) or after school tutoring learning experiences may serve as an unexplored Shadow education system” (Bray, 1999) “PT as shadow education is a metaphor to signify its hidden nature and the way in which it mirrors the formal system in scope, intensity and size.” ( Marimuthuet al., 1991)

3 Private Tutoring or Shadow Education Use of the “Shadow” Metaphor The “shadow” metaphor fits in three ways: 1)PT exists because of a perceived or real deficiency in mainstream education systems; 2)Shape and size of mainstream education systems change so do the sizes, function and shape of PT; 3)Public attention is more apt to focus on the mainstream issue than on its shadow.

4 For some, PT is not just a passive entity but is poised to negatively affect the body it imitates. Hartman (2007) uses the phrase “informal market of education” in contrast to the shadow education system. She conceives of education being turned into a marketable good or into the object of a commercial transaction (or, Commodification). Private Tutoring: An Informal Education Market Commodification of Education

5 Private Tutoring Characteristics Lean onPass onRide on For whom Low achieving students, slow learners Students with busy parents, lacking assistance in their school work Both low and high achieving students, students whose parents can afford tutorial fee For what Hidden remedial activities Supplementary activities Structured, remedial and enrichment activities With whomSchool teachers School teachers, small scale institutions Multinational institutions, learning centers, experts in the field, university students By whomUnregulatedRegulated as a business entity Regulated as a Business or academic entity Source: Adapted from Castro and Guzman(2012)

6 Location Year of study Rural / Urban area Primary / Secondary school Bangladesh % of rural and 52% of urban primary school students consumed private tutoring 31% of primary school students consumed private tutoring Cambodia % of 77 primary schools surveyed consumed private tutoring Canada1990sTutoring businesses in major cities grew 200 to 500 % China % of primary 66% of lower secondary and 54% of upper secondary students consumed private tutoring Cyprus % of secondary school students consume private tutoring Egypt % in urban and 52% in ruralAll levels Hong Kong % of primary 28% of lower secondary,34 48% in upper secondary school students consumed private tutoring India % of children in urban areas consume private tutoring 40% of primary students consume private tutoring Private Tutoring Trends Cross National Indicators of Private Tutoring Source: Adapted from Bray 2003 and 2009

7 Location Year of study Rural / Urban area Primary / Secondary school Japan % children in urban areas consume private tutoring 65% of junior secondary students consume private tutoring Kenya % of sixth graders consumed private tutoring Malta % of primary and secondary school students consume private tutoring Republic of Korea % of primary school students, 56% of middle school and 32 % of high school students consume private tutoring Romania % of secondary school students consume private tutoring 58 % of secondary school students consume private tutoring Taiwan % of secondary schools students consume private tutoring Vietnam % of primary school students paid 29% of household expenditure to consume private tutoring Private Tutoring Trends Cross National Indicators of Private Tutoring Source: Adapted from Bray 2003 and 2009

8 Most studies have looked into the public schools versus the private tutoring environment seeking policy options for the government. Few looked from a game theoretical model perspective. In our paper, we propose to look into the interaction of private schools, private tutoring, students, parents, teachers and the government in a three stage game model. Private Tutoring Game Theoretical Perspective

9 Private Tutoring Game Theoretic Setup Period 1 3-stage setup ActorsObjective/ Main GoalsActions Stage 1 Higher Authority at Government funded Charter School Maximize social return from education through policies geared through private tutoring Decides on four basic policy responses to private tutoring: (1) Ignore – most countries; (2) Prohibit – South Korea; (3) Regulate – Mauritius, Hong Kong (4) Encourage – Singapore, Taiwan (1) Ignore – do nothing (2) Prohibit and Regulate – Low-incentive policies; (3) Encourage – High- incentive policies Stage 2 Teachers involved with private tutoring Maximize expected income through teaching salary and private tutoring How much time to allocate for private tutoring (optimal effort for private tutoring) Stage 3 ParentsMaximize net benefits of private tutoring investments allocated (private tuition) for children Amount of money to set aside for private tuition

10 Private Tutoring Game Theoretic Setup Period 2 ActorsObjective / Main Goals Higher Authority at Government funded Charter School Maximize social return from education policy Teachers involved with private tutoring Maximize expected income ParentsChildren grow up and realize an income through an earnings function Or, Children grow up and get access to better colleges and universities through higher grades

11 Private Tutoring Game Theoretic Setup: Parents  Parent’s lifetime utility function is

12 For Charter School going children: For Private School going children: Private Tutoring Game Theoretic Setup: Parents

13  Parent’s period 2 goal of having their child placed at University / College with Scholarships or ensuring higher intergenerational income mobility with their child earning more than their income Private Tutoring Game Theoretic Setup: Parents

14 Parent’s utility maximization problem is Private Tutoring Game Theoretic Setup: Parents

15 Parent’s utility maximization problem is Private Tutoring Game Theoretic Setup: Parents

16 Parent’s inverse market demand for private tutorial, utilizing Private Tutoring Game Theoretic Setup: Parents

17 Goal: Improve the overall level of school education Policy options:  Do Nothing (Policy 1) and Encourage (Policy 4): No penalty imposed on the teacher for shirking responsibilities to create private tutoring demand  Prohibit (Policy 2) and Regulate (Policy 3): Impose penalty on the teacher for shirking school responsibilities to create private tutoring demand Private Tutoring Game Theoretic Setup: Higher Authority

18 Penalty Structure: Private Tutoring Game Theoretic Setup: Higher Authority

19 Teacher Profit Function: Assume, Private Tutoring Game Theoretic Setup: Teacher

20 Total Supply of Tutoring: Supply curve for each fringe tutor: Private Tutoring Game Theoretic Setup: Teacher

21 Assume, Private Tutoring Game Theoretic Setup: Teacher

22 Residual Fringe Demand: Total Tutorial supply of the fringe: Private Tutoring Game Theoretic Setup: Teacher

23 Teacher’s Maximization Problem: Private Tutoring Game Theoretic Setup: Teacher

24 First Order Condition, Private Tutoring Game Theoretic Setup: Teacher

25 Second Order Condition,  If a > s, the teacher’s incentive to work varies smoothly, as the marginal returns from shirking declines gradually from a value greater than the marginal cost of shirking.  This also suggests that school infrastructure (professional development for teachers) affects the teacher’s incentive in a significant way. Private Tutoring Game Theoretic Setup: Teacher

26 Optimal shirking for the Teacher, Private Tutoring Game Theoretic Setup: Teacher

27 Assuming partial shirking, we derive the teacher’s optimal dutifulness and the resultant school education, Dutifulness (e) increases with salary, but with professional development, s, the result is ambiguous Private Tutoring Game Theoretic Setup: Teacher Education received at school is increasing with salary but the impact of professional development on teacher is ambiguous

28 Total Education for a Student, Private Tutoring Game Theoretic Setup: Teacher

29 Teacher’s expected income,  The teacher’s expected income is decreasing in school infrastructure as private tuition demand goes down and increasing in teacher’s salary Private Tutoring Game Theoretic Setup: Teacher

30 Private Tutoring Game Theoretic Setup: Higher Authority

31

32 Major Findings… Teacher’s Perspectives:  Teacher’s dutifulness increases with salary but with professional development, the result is ambiguous  Education received at school is increasing with teacher salary but with professional development, the result is ambiguous  The teacher’s expected income is decreasing in school infrastructure (via fall in private tuition demand) and increasing in teacher’s salary

33 Major Findings… Higher Authority’s Perspectives: If the higher authority cares only about the total education of the students and therefore is unmindful of its sources, he would not mind lowering the wage, even if it reduces teacher’s dutifulness; Such policy would encourage more private tutoring from the teachers. Parent’s Perspectives:  Given the circumstances, the parents are expected to prefer this outcome as overall education and parent’s utility will be higher with this policy choice. Explains why there is lack

34 Future Directions…  Check how the results vary with “no penalty” Do Nothing (Policy 1) and Encourage (Policy 4): No penalty imposed on the teacher for shirking responsibilities to create private tutoring demand  Also, verify other possible policy options for the higher authority with governmental and community support to get the most out of teacher professional development and private tutoring mix.

35 Thank you


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