Using a national household survey data on rural India, the article estimates coefficients of elasticity to examine two important questions on the nature of household expenditure on education: how do households behave in spending on education, given a change in their levels of economic development; and whether households complement or substitute public efforts in spending on education? The results indicate that there is a complementary relationship between household and government expenditures on education; and that household expenditures respond favourably but less than proportionately to changes in household incomes.
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