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School Choice: Traditional Mechanisms and Extending the Poor's Ability to Choose

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Author Info

  • Sinan Sarpça

    ()
    (Department of Economics, Koç University)

  • Kuzey Yılmaz

    (Department of Economics, Koç University)

  • Eric Hanushek

    (Stanford University)

Abstract

We develop a multi-community urban land use framework to investigate the implications of increasing school choice opportunities on educational and residential choices of a city's residents. When deciding on the location and the size of land, the households care about the distance to the business district, and a local public good: education. There is a private education alternative that breaks the link between choosing a residence area and choosing a school. The households differ in their incomes and preferences for education. In five models that differ in various aspects of choice and financing, we study the housing and education choices of the city residents, and the endogenously determined education provision levels in equilibrium. The results of the article support reformist arguments: We ¯rst show that the presence of a private alternative benefits every household, whereas school district consolidation hurts everyone. We then examine two policies that aim to increase choice. An untargeted local government support (financed by property taxes) that can be used at the private school can improve things for talented poor. A policy that supports the talented poor (using city income taxes) with funds that can be used for public as well as private schools can also improve welfare of all talented students, rich or poor.

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Bibliographic Info

Paper provided by Koc University-TUSIAD Economic Research Forum in its series Koç University-TUSIAD Economic Research Forum Working Papers with number 0709.

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Length: 33 pages
Date of creation: Sep 2007
Date of revision:
Handle: RePEc:koc:wpaper:0709

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Keywords: Tiebout Model; Urban Location Model; School Choice.;

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  1. 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.
  2. Charles Ka-Yui Leung, 2004. "Macroeconomics and Housing: A Review of the Literature," Departmental Working Papers _164, Chinese University of Hong Kong, Department of Economics.
  3. de Bartolome, Charles A. M. & Ross, Stephen L., 2003. "Equilibria with local governments and commuting: income sorting vs income mixing," Journal of Urban Economics, Elsevier, vol. 54(1), pages 1-20, July.
  4. Rangazas, Peter, 1995. " Vouchers and Voting: An Initial Estimate Based on the Median Voter Model," Public Choice, Springer, vol. 82(3-4), pages 261-79, March.
  5. Cohen-Zada, Danny & Justman, Moshe, 2005. "The religious factor in private education," Journal of Urban Economics, Elsevier, vol. 57(3), pages 391-418, May.
  6. Dennis Epple & Richard Romano, 2008. "Educational Vouchers And Cream Skimming," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1395-1435, November.
  7. Epple, Dennis & Nechyba, Thomas, 2004. "Fiscal decentralization," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 55, pages 2423-2480 Elsevier.
  8. Thomas J. Nechyba, 2000. "Mobility, Targeting, and Private-School Vouchers," American Economic Review, American Economic Association, vol. 90(1), pages 130-146, March.
  9. Elizabeth M. Caucutt, 2002. "Educational Vouchers When There Are Peer Group Effects--Size Matters," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(1), pages 195-222, February.
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