Tag Archive for: economics

New working paper available from IZA – Institute for Labor Economics.

What Do Parents Value in a Child Care Provider? Evidence from Yelp Consumer Reviews – IZA Discussion Paper No. 11741. Click here to download.

This paper exploits novel data and empirical methods to examine parental preferences for
child care. Specifically, we analyze consumer reviews of child care businesses posted on the
website Yelp.com. A key advantage of Yelp is that it contains a large volume of unstructured
information about a broad set of child care programs located in demographically and
economically diverse communities. Thus our analysis relies on a combination of theoryand
data-driven methodologies to organize and classify the characteristics of child care
that are assessed by parents. We also use natural language processing techniques to
examine the affect and psychological tones expressed in the reviews. Our main results are
threefold. First, we find that consumers overall are highly satisfied with their child care
provider, although those in higher-income markets are substantially more satisfied than
their counterparts in lower-income markets. Second, the program characteristics most
commonly evaluated by consumers relate to safety, quality of the learning environment,
and child-teacher interactions. However, lower- and higher-income consumers evaluate
different characteristics in their reviews. The former is more likely to comment on a
program’s practical features, such as its pricing and accessibility, while the latter is more
likely to focus on the learning environment. Finally, we find that consumers in lowerincome
markets are more likely to display negative psychological tones such as anxiety and
anger in their reviews, particularly when discussing the nature of their interactions with
program managers and their child’s interactions with teachers.