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Good Principals or Good Peers? Parental Valuation of School Characteristics, Tiebout Equilibrium, and the Effects of Inter-district Competition

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  • Jesse Rothstein

Abstract

School choice policies may improve productivity if parents choose well-run schools, but not if parents primarily choose schools for their peer groups. Theoretically, high income families cluster near preferred schools in housing market equilibrium; these need only be effective schools if effectiveness is highly valued. If it is, equilibrium effectiveness sorting' will be more complete in markets offering more residential choice. Although effectiveness is unobserved to the econometrician, I discuss observable implications of effectiveness sorting. I find no evidence of a choice effect on sorting, indicating a small role for effectiveness in preferences and suggesting caution about choice's productivity implications.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10666.

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Date of creation: Aug 2004
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Publication status: published as Rothstein, Jesse M. "Good Principals Or Good Peers? Parental Valuation Of School Characteristics, Tiebout Equilibrium, And The Incentive Effects Of Competition Among Jurisdictions," American Economic Review, 2006, v96(4,Sep), 1333-1350.
Handle: RePEc:nbr:nberwo:10666

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Cited by:
  1. Miguel Urquiola & Eric Verhoogen, 2007. "Class Size and Sorting in Market Equilibrium: Theory and Evidence," NBER Working Papers 13303, National Bureau of Economic Research, Inc.
  2. 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.
  3. Deborah Wilson, 2008. "Exit, Voice and Quality in the English Education Sector," The Centre for Market and Public Organisation 08/194, Department of Economics, University of Bristol, UK.

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