Evaluating the Office of Fair Trading’s ‘fee-paying schools’ intervention

Abstract

This paper assesses the impact of the 2006 OFT intervention addressing the anti-competitive exchange of information in the setting of school fees by a group of 50 schools in the United Kingdom. Availing of a large panel dataset of school fees and other schools' characteristics, the paper employs a differences-in-differences methodology to allow robust and statistically significant findings to be drawn. Evolution of school fees of the group of 50 infringing schools-subject to OFT treatment-is compared with a 'no-intervention' counterfactual scenario, informed by reference to a control group of 178 non-participating schools. The analysis controls for other factors that may influence the determination of fees, most notably the quality of the schools. The analysis finds the OFT intervention leads to a reduction of 1.6 % in the boarding fees of the infringing schools. This equates to savings of approximately £500 per boarder per term, and suggests consumer savings of around £85m may have been realised since intervention. Additional potential effects in spurring wider competitive responses by non-infringing schools are not considered in this analysis, and underline the conservative nature of the findings.

The effects of competition and collaboration on efficiency in the UK independent school sector

“…There is a growing literature which examines aspects of the (UK) independent school sector, and in particular the senior independent school sector. These studies focus on factors determining demand for an independent school education (Blow et al 2010;Blundell et al 2010;Dearden and Sibieta 2010); the determinants of examination success (Graddy and Stevens 2005); the wage benefits of attending an independent school, (Dolton and Vignoles 2000;Dearden et al 2002;Naylor et al 2002;Green et al 2012); the determinants of school fees (Starkie and Wise 2006;Elliott et al 2016); and details of the Sevenoaks fee-setting cartel (Pesaresi et al 2015;Elliott et al 2016). To date there is no work on determinants of efficiency in the UK independent school sector.…”