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Tiebout choice and universal school vouchers

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Author Info

  • Brunner, Eric J.
  • Imazeki, Jennifer

Abstract

This paper examines who is likely to gain and who is likely to lose under a universal voucher program. Following Epple and Romano [D. Epple, R.E. Romano, Competition between private and public schools, vouchers, and peer group effects, American Economic Review 88 (1998) 33-62; D. Epple, R.E. Romano, Neighborhood schools, choice, and the distribution of educational benefits, in: C.M. Hoxby (Ed.), The Economics of School Choice, The Univ. of Chicago Press, Chicago, 2003, pp. 227-286], and Nechyba T.J. Nechyba, Mobility, targeting, and private school vouchers, American Economic Review 90 (2000) 130-146; T.J. Nechyba, Introducing school choice into multidistrict public school systems, in: C.M. Hoxby (Ed.), The Economics of School Choice, The Univ. of Chicago Press, Chicago, 2003, pp. 145-194], we focus on the idea that gains and losses under a universal voucher depend on two effects: changes in peer group composition and changes in housing values. We show that the direction and magnitude of each of these effects hinge critically on market structure, i.e., the amount of school choice that already exists in the public sector. In markets with little or no Tiebout choice, potential changes in peer group composition create an incentive for high-socioeconomic (SES) households to vote for the voucher and for low-SES households to vote against voucher. In contrast, in markets with significant Tiebout choice, potential changes in housing values create an incentive for high-SES households to vote against the voucher and for low-SES households to vote for the voucher. Using data on vote outcomes from California's 2000 voucher initiative, we find evidence consistent with those predictions.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 63 (2008)
Issue (Month): 1 (January)
Pages: 253-279

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Handle: RePEc:eee:juecon:v:63:y:2008:i:1:p:253-279

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Web page: http://www.elsevier.com/locate/inca/622905

Related research

Keywords: School vouchers Tiebout choice Peer effects Capitalization;

References

References listed on IDEAS
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  1. Thomas J. Nechyba, 2003. "Introducing School Choice into Multidistrict Public School Systems," NBER Chapters, in: The Economics of School Choice, pages 145-194 National Bureau of Economic Research, Inc.
  2. Epple, Dennis & Figlio, David & Romano, Richard, 2004. "Competition between private and public schools: testing stratification and pricing predictions," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1215-1245, July.
  3. Dennis N. Epple & Richard Romano, 2003. "Neighborhood Schools, Choice, and the Distribution of Educational Benefits," NBER Chapters, in: The Economics of School Choice, pages 227-286 National Bureau of Economic Research, Inc.
  4. Brunner, Eric & Sonstelie, Jon, 2003. "Homeowners, property values, and the political economy of the school voucher," Journal of Urban Economics, Elsevier, vol. 54(2), pages 239-257, September.
  5. Lankford, Hamilton & Wyckoff, James, 2001. "Who Would Be Left Behind by Enhanced Private School Choice?," Journal of Urban Economics, Elsevier, vol. 50(2), pages 288-312, September.
  6. Sandra E. Black, 1999. "Do Better Schools Matter? Parental Valuation Of Elementary Education," The Quarterly Journal of Economics, MIT Press, vol. 114(2), pages 577-599, May.
  7. Thomas A. Downes & Shane M. Greenstein, 1996. "Understanding the Supply Decisions of Nonprofits: Modelling the Location of Private Schools," RAND Journal of Economics, The RAND Corporation, vol. 27(2), pages 365-390, Summer.
  8. Jesse M. Rothstein, 2006. "Good Principals or Good Peers? Parental Valuation of School Characteristics, Tiebout Equilibrium, and the Incentive Effects of Competition among Jurisdictions," American Economic Review, American Economic Association, vol. 96(4), pages 1333-1350, September.
  9. Nechyba, Thomas J., 2002. "Centralization, Fiscal Federalism and Privte School Attendance," Working Papers 02-11, Duke University, Department of Economics.
  10. Reback, Randall, 2005. "House prices and the provision of local public services: capitalization under school choice programs," Journal of Urban Economics, Elsevier, vol. 57(2), pages 275-301, March.
  11. Dennis Epple & Thomas Romer & Holger Sieg, 2001. "Interjurisdictional Sorting and Majority Rule: An Empirical Analysis," Econometrica, Econometric Society, vol. 69(6), pages 1437-1465, November.
  12. Dennis Epple & Holger Sieg, 1999. "Estimating Equilibrium Models of Local Jurisdictions," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 645-681, August.
  13. Downes, Thomas A & Greenstein, Shane M, 2002. "Entry into the Schooling Market: How Is the Behaviour of Private Suppliers Influenced by Public Sector Decisions?," Bulletin of Economic Research, Wiley Blackwell, vol. 54(4), pages 341-71, October.
  14. Caroline M. Hoxby, 2000. "Does Competition among Public Schools Benefit Students and Taxpayers?," American Economic Review, American Economic Association, vol. 90(5), pages 1209-1238, December.
  15. Bogart, William T. & Cromwell, Brian A., 2000. "How Much Is a Neighborhood School Worth?," Journal of Urban Economics, Elsevier, vol. 47(2), pages 280-305, March.
  16. Thomas J. Nechyba, 2000. "Mobility, Targeting, and Private-School Vouchers," American Economic Review, American Economic Association, vol. 90(1), pages 130-146, March.
  17. Eric J. Brunner & Jon Sonstelie, 2006. "California's School Finance Reform: An Experiment in Fiscal Federalism," Working papers 2006-09, University of Connecticut, Department of Economics.
  18. Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
  19. Holger Sieg & V. Kerry Smith & H. Spencer Banzhaf & Randy Walsh, . "Estimating the General Equilibrium Benefits of Large Changes in Spatially Delineated Public Goods," GSIA Working Papers 2003-07, Carnegie Mellon University, Tepper School of Business.
  20. Figlio, David N. & Stone, Joe A., 2001. "Can Public Policy Affect Private School Cream Skimming?," Journal of Urban Economics, Elsevier, vol. 49(2), pages 240-266, March.
  21. Miguel Urquiola, 2005. "Does School Choice Lead to Sorting? Evidence from Tiebout Variation," American Economic Review, American Economic Association, vol. 95(4), pages 1310-1326, September.
  22. McMillan, Robert, 2004. "Competition, incentives, and public school productivity," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1871-1892, August.
  23. Epple, Dennis & Platt, Glenn J., 1998. "Equilibrium and Local Redistribution in an Urban Economy when Households Differ in both Preferences and Incomes," Journal of Urban Economics, Elsevier, vol. 43(1), pages 23-51, January.
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Citations

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Cited by:
  1. Calsamiglia, Caterina & Guell, Maia, 2014. "The Illusion of School Choice: Empirical Evidence from Barcelona," Working Papers 712, Federal Reserve Bank of Minneapolis.
  2. Rebecca Allen & Simon Burgess, 2012. "How should we treat under-performing schools? A regression discontinuity analysis of school inspections in England," DoQSS Working Papers 12-02, Department of Quantitative Social Science - Institute of Education, University of London.
  3. Rebecca Allen & Simon Burgess & Tomas Key, 2010. "Choosing secondary school by moving house: school quality and the formation of neighbourhoods," DoQSS Working Papers 10-21, Department of Quantitative Social Science - Institute of Education, University of London.
  4. Gerdes, Christer, 2010. "Does Immigration Induce 'Native Flight' from Public Schools? Evidence from a Large Scale Voucher Program," IZA Discussion Papers 4788, Institute for the Study of Labor (IZA).
  5. Eric J. Brunner & Stephen L. Ross, 2009. "Is the Median Voter Decisive? Evidence of 'Ends Against the Middle' From Referenda Voting Patterns," Working papers 2009-02, University of Connecticut, Department of Economics, revised May 2010.
  6. Calsamiglia, Caterina & Güell, Maia, 2014. "The Illusion of School Choice: Empirical Evidence from Barcelona," IZA Discussion Papers 8202, Institute for the Study of Labor (IZA).
  7. Brunner, Eric J. & Cho, Sung-Woo & Reback, Randall, 2012. "Mobility, housing markets, and schools: Estimating the effects of inter-district choice programs," Journal of Public Economics, Elsevier, vol. 96(7), pages 604-614.
  8. Christer Gerdes, 2013. "Does immigration induce “native flight” from public schools?," The Annals of Regional Science, Springer, vol. 50(2), pages 645-666, April.

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