This paper investigates the determinants of living standards (measured by per capita
consumption expenditure) at the household level, addressing heterogeneity in the impact
of education and endogeneity of educational attainment. The estimation results obtained
through an instrumental variables quantile regression suggest that the endogeneity of
education matters in determining the causal effect of education on living standards. On
the other hand, no evidence of heterogeneity in the percentage impact of education is
found. However, the results also provide evidence that the impact of other determinants
varies significantly over the outcome (expenditure) distribution, and consequently a
simulation based on the results shows that the level impact of education on consumption
expenditure differs substantially between the instrumental variables quantile regression
and standard instrumental variables regression results. The comparison of the two shows
that the poverty alleviation impact of education estimated through the instrumental
variables quantile regression are much smaller than the impact estimated through the
standard instrumental variable regression.