Does quality matter in determining child care prices? Evidence from private child care provision in Turkey

Child care prices are expected to reflect the quality of provision. However, in contexts where there are high information asymmetries between the users of the services and providers, we may expect this link between quality and prices to be weaker. Turkey is selected for the study as it has a highly regulated child care sector where the costs of accreditation and initial setup are high. However, there is very little on-going supervision and no information provided to users on the quality or ranking of these services. This paper investigates the role of quality in determining private child care prices using a unique provider-level data set collected in five provinces of Turkey. Regression results show that prices are mainly driven by infrastructure quality while human resources and curriculum and materials quality scores that are more likely to have a strong bearing on child development do not have a significant impact on prices.