Option values, stipends and the returns to educational investment

Yochanan P. Comay, Arie Melnik, Moshe A. Pollatschek

Research output: Contribution to journalArticlepeer-review


In this paper we use a dynamic model of the returns to educational investment to analyze the flow of students moving through the various stages of an educational system. Dropout and graduation rate are linked to the profitability of an educational stage and thus may be influenced by an appropriate choice of stipend level. To determine the effects of changes in stipends on the output of the educational system we hypothesize a probability distribution of abilities in the population. The parameters of this distribution permit the estimation of the effects of stipends on the graduation rate of each educational stage.

Original languageEnglish
Pages (from-to)243-260
Number of pages18
JournalJournal of Econometrics
Issue number2
StatePublished - Sep 1977
Externally publishedYes

ASJC Scopus subject areas

  • Applied Mathematics
  • Economics and Econometrics


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