Estimation of income elasticity of urban households’ demand for public education in cities

Current article is allocated to the report of a research in which the income elasticities of urban households’ demand for public education in time period of 2009-2014 were estimated separately according to the income deciles and by applying Rotterdam Demand System, it was clarified that public education is normal good. Different size of estimated elasticities indicated that public education is necessary for the households belonged to the sixth to tenth income deciles and it is luxury for first to fifth income deciles and it can be expected that if the income of households belonged to the first to fifth deciles faces with reduction, mentioned households for one percent reduction of income will reduce their demand for public education more than one percent and they will consume the related resources for necessary goods and services. In contrast, the households belonged to the sixth to tenth deciles reduce the share of luxury goods and services in their cost basket so that not to be forced to reduce their public education costs proportional with income reduction. Therefore, the effective policies on households’ income should be compiled and executed in a manner that not to cause reduction of the demand of households for education especially for groups with low and average income