The summary results of the Household Income and Expenditure Survey 2006/07 conducted by the Sri Lanka Department of Census and Statistics make interesting reading.
According to the latest HIES, an average household spends LKR 539 per month on communication (2.35 per cent of the total). We know that there are no subsidies here. In contrast, the monthly spend on education, which is free from kindergarten to undergraduate degree and beyond costs an average household LKR 632 per month (2.75 per cent of the total). How come?
For us at LIRNEasia, obviously the 2.35% is the more interesting number, especially because we have seen that people seem to be spending quite a bit more than that on communication. But I am sure most thinking Sri Lankans will have to wonder why people are spending so much on a so-called free service? Is it that the free service stinks?
One more item to ponder: personal care and health takes up 4.27% of monthly expenditure (LKR 980). Even if we leave out half of that for beauty care, seems like healthcare is taking over 2 per cent of expenditure. This too is a free service provided by the government.
When a consumer decides and pays for a service(as in communication) she controls quality.
When a third party (Govt) takes the buying decision and pays the consumer has no control over quality.
Not sure about the connection.
The average communication spend (I suppose this includes postal costs also), is LKR 539/month. The prepaid ARPUs are in this range, so obviously this matches.
Now education is a different matter. The government pays for education through tax money (all education except in international schools is subsidized; the government pays teacher salaries in even the so-called private schools). So why are people spending so much on education? Is this how big the tuition bill is? If people are spending so much on tuition, perhaps that is the main cause of the improvements in educational performance written about by Harsha Aturupane of the World Bank in glowing terms recently.