Parents are today choosing to send, or not to send, their child to alternative schools based partially on the price of doing so. The model incorporates a price elasticity of demand parameter to project the likely behavior of parents sending their children to alternative schools, as the price changes. Based on this wide body of research on related quantities, and some limited data on demand for alternative and traditional public school services, we have used a price elasticity of demand of 1.0 in this model. 94
While it is impossible to know the actual price elasticity of demand, there is a small amount of data showing that a financial incentive of approximately $1,000 will, in present-day Michigan, induce parents to send their child to alternative schools.95 Economic theory also holds firmly that parents have a strong desire to send their children to better schools, since it increases their "human capital" and thus their earning power for the future. Since we know that a significant number of parents already send their children to an alternative schoolall the while paying twicewe cannot avoid the fact that many consumers in this market perceive the value of an alternative school education very highly.