(a) The proposed school voucher system in Hong Kong kindergartens prohibits the schools receiving vouchers from turning into money-making organizations, i.e. schools receiving vouchers must be non-profit organizations.  What would you expect the key differences in kindergarten performance to be, whether or not money-making is allowed?

(b) The government has said that the voucher system is not meant to help school owners make money for themselves.  Could schools make profit through the cash-convertible vouchers under competition, if money-making is allowed?  Could they earn rent?

(c) Suppose, instead of subsidizing education through the voucher system, the government passes a law, forcing parents to pay fully for their children’s schooling.  Would you expect better or worse students to be produced when the schooling is fully financed by parents, as compared with that of the voucher system?