From Nishimura and Yamano (World Development, November 2012). Early draft (2008).The number of private schools has increased by more than four times since the introduction of the Free Primary Education (FPE) policy in 2003 in Kenya. With the help of panel data obtained from rural Kenya, we observed that the proportion of children attending private primary schools increased from 4.6% in 2004 to 11.5% in 2007. The estimation results suggest that parents react to the quality of public education, as measured by the pupil–teacher ratios of public schools, by attending private schools and transferring to different schools. Their reaction also depends on the wealth of households and gender.