Does Competition Among Public Schools Benefit Students and Taxpayers? A Comment on Hoxby (2000)
AbstractIn 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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Date of creation: Mar 2005
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Find related papers by JEL classification:
- H7 - Public Economics - - State and Local Government; Intergovernmental Relations
- I2 - Health, Education, and Welfare - - Education
- R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-04-03 (All new papers)
- NEP-GEO-2005-04-03 (Economic Geography)
- NEP-PBE-2005-04-03 (Public Economics)
- NEP-URE-2005-04-03 (Urban & Real Estate Economics)
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