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Using Market Valuation to Assess the Importance and Efficiency of Public School Spending

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  • Lisa Barrow

    (Federal Reserve Bank of Chicago)

  • Cecilia Elena Rouse

    (Princeton University and NBER)

Abstract

In this paper we take a "market-based" approach to examine whether increased expenditures improve perceived school quality and whether the current level of public school provision is inefficient. We find evidence that, on average, school districts are not wasting taxpayers' education dollars. Rather, if anything, we find that education may be underfunded. As a result, increased competition has the potential to increase school spending levels. We also find evidence that school districts spend less efficiently in areas in which school districts face less competition from other public schools and in areas in which residents are less educated (leading either to less mobility from a lack of resources or to less efficient education production through peer effects).

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Bibliographic Info

Paper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 1446.

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Date of creation: 01 Aug 2000
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Handle: RePEc:ecm:wc2000:1446

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Cited by:
  1. repec:fth:prinin:440 is not listed on IDEAS
  2. Fox, William F. & Gurley, Tami, 2006. "Will consolidation improve sub-national governments ?," Policy Research Working Paper Series 3913, The World Bank.
  3. Lisa Barrow & Cecilia Elena Rouse, 2005. "Causality, causality, causality: the view of education inputs and outputs from economics," Working Paper Series, Federal Reserve Bank of Chicago WP-05-15, Federal Reserve Bank of Chicago.
  4. Byron F. Lutz, 2006. "Taxation with representation: intergovernmental grants in a plebiscite democracy," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 2006-06, Board of Governors of the Federal Reserve System (U.S.).

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