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Does Competition Among Public Schools Benefit Students and Taxpayers? A Comment on Hoxby (2000)

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  • Jesse Rothstein

Abstract

In an influential paper, Hoxby (2000) studies the relationship between the degree of so-called "Tiebout choice" among local school districts within a metropolitan area and average test scores. She argues that choice is endogenous to school quality, and instruments with the number of larger and smaller streams. She finds a large positive effect of choice on test scores, which she interprets as evidence that school choice induces greater school productivity. This paper revisits Hoxby's analysis. I document several important errors in Hoxby's data and code. I also demonstrate that the estimated choice effect is extremely sensitive to the way that "larger streams" are coded. When Hoxby's hand count of larger streams is replaced with any of several alternative, easily replicable measures, there is no significant difference between IV and OLS, each of which indicates a choice effect near zero. There is thus little evidence that schools respond to Tiebout competition by raising productivity. A data appendix for this paper is available online

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11215.

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Date of creation: Mar 2005
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Publication status: published as "Does Competition Among Public Schools Benefit Students and Taxpayers? A Comment on Hoxby (2000)." American Economic Review 97(5), December 2007, pp. 2026-2037.
Handle: RePEc:nbr:nberwo:11215

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  1. Caroline Hoxby & M. Daniele Paserman, 1998. "Overidentification Tests with Grouped Data," NBER Technical Working Papers, National Bureau of Economic Research, Inc 0223, National Bureau of Economic Research, Inc.
  2. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780195060119, October.
  3. Caroline M. Hoxby, 2000. "Does Competition among Public Schools Benefit Students and Taxpayers?," American Economic Review, American Economic Association, American Economic Association, vol. 90(5), pages 1209-1238, December.
  4. Moulton, Brent R., 1986. "Random group effects and the precision of regression estimates," Journal of Econometrics, Elsevier, Elsevier, vol. 32(3), pages 385-397, August.
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Cited by:
  1. Bjerk, David J., 2009. "Thieves, Thugs, and Neighborhood Poverty," IZA Discussion Papers, Institute for the Study of Labor (IZA) 4470, Institute for the Study of Labor (IZA).
  2. Gallego Francisco, 2013. "When Does Inter-School Competition Matter? Evidence from the Chilean “Voucher” System," The B.E. Journal of Economic Analysis & Policy, De Gruyter, De Gruyter, vol. 13(2), pages 525-562, August.
  3. Victor Lavy, 2006. "From Forced Busing to Free Choice in Public Schools: Quasi-Experimental Evidence of Individual and General Effects," NBER Working Papers, National Bureau of Economic Research, Inc 11969, National Bureau of Economic Research, Inc.
  4. David M. Brasington, . "Public and Private School Competition: The Spatial Education Production Function," Departmental Working Papers, Department of Economics, Louisiana State University 2005-09, Department of Economics, Louisiana State University.
  5. Joëlle Noailly & Suncica Vujic & Ali Aouragh, 2009. "The effects of competition on the quality of primary schools in the Netherlands," CPB Discussion Paper, CPB Netherlands Bureau for Economic Policy Analysis 120, CPB Netherlands Bureau for Economic Policy Analysis.
  6. Caroline M. Hoxby, 2005. "Competition Among Public Schools: A Reply to Rothstein (2004)," NBER Working Papers, National Bureau of Economic Research, Inc 11216, National Bureau of Economic Research, Inc.
  7. Kenneth Fortson & Natalya Verbitsky-Savitz & Emma Kopa & Philip Gleason, 2012. "Using an Experimental Evaluation of Charter Schools to Test Whether Nonexperimental Comparison Group Methods Can Replicate Experimental Impact Estimates," Mathematica Policy Research Reports, Mathematica Policy Research 7443, Mathematica Policy Research.
  8. Loeb, Susanna & Valant, Jon & Kasman, Matt, 2011. "Increasing Choice In The Market For Schools: Recent Reforms And Their Effects On Student Achievement," National Tax Journal, National Tax Association, National Tax Association, vol. 64(1), pages 141-63, March.
  9. Oliver Himmler, 2009. "The Effects of School Competition on Academic Achievement and Grading Standards," CESifo Working Paper Series, CESifo Group Munich 2676, CESifo Group Munich.

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