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Good Principals or Good Peers? Parental Valuation of School Characteristics, Tiebout Equilibrium, and the Incentive Effects of Competition among Jurisdictions

  • Jesse M. Rothstein

In a multicommunity model, high-income families cluster together in any equilibrium, and cluster near effective schools if effectiveness is an important component of community desirability. Governmental fragmentation facilitates this residential sorting. Thus, if parents prefer effective schools, income correlates with effectiveness in high-choice-market equilibrium. I examine the distribution of student background and test scores across schools within metropolitan areas that differ in the structure of educational governance. I find little indication of the ?effectiveness sorting? that is predicted if parents choose neighborhoods for the efficacy of the local schools. This suggests caution about the productivity implications of school choice policies. (JEL H73, I21, R21, R23)

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Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 96 (2006)
Issue (Month): 4 (September)
Pages: 1333-1350

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Handle: RePEc:aea:aecrev:v:96:y:2006:i:4:p:1333-1350
Note: DOI: 10.1257/aer.96.4.1333
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  1. Antos, Joseph R. & Rosen, Sherwin, 1975. "Discrimination in the market for public school teachers," Journal of Econometrics, Elsevier, vol. 3(2), pages 123-150, May.
  2. Borland, Melvin V. & Howsen, Roy M, 1992. "Student academic achievement and the degree of market concentration in education," Economics of Education Review, Elsevier, vol. 11(1), pages 31-39, March.
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  7. Fernandez, Raquel & Rogerson, Richard, 1997. "Keeping People Out: Income Distribution, Zoning, and the Quality of Public Education," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(1), pages 23-42, February.
  8. William G. Howell & Patrick J. Wolf & David E. Campbell & Paul E. Peterson, 2002. "School vouchers and academic performance: results from three randomized field trials," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 21(2), pages 191-217.
  9. David N. Figlio & Maurice E. Lucas, 2004. "What's in a Grade? School Report Cards and the Housing Market," American Economic Review, American Economic Association, vol. 94(3), pages 591-604, June.
  10. Clark, Melissa & Rothstein, Jesse & Schanzenbach, Diane Whitmore, 2009. "Selection bias in college admissions test scores," Economics of Education Review, Elsevier, vol. 28(3), pages 295-307, June.
  11. Caroline Minter Hoxby, 1994. "Does Competition Among Public Schools Benefit Students and Taxpayers?," NBER Working Papers 4979, National Bureau of Economic Research, Inc.
  12. Cullen, Julie Berry & Jacob, Brian A. & Levitt, Steven D., 2005. "The impact of school choice on student outcomes: an analysis of the Chicago Public Schools," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 729-760, June.
  13. Hoxby, Caroline M., 1999. "The productivity of schools and other local public goods producers," Journal of Public Economics, Elsevier, vol. 74(1), pages 1-30, October.
  14. Patrick Bayer & Fernando Ferreira & Robert McMillan, 2003. "A Unified Framework for Estimating Preferences for Schools and Neighborhoods," Working Papers 872, Economic Growth Center, Yale University.
  15. Dennis Epple & Holger Sieg, 1999. "Estimating Equilibrium Models of Local Jurisdictions," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 645-681, August.
  16. Hanushek, Eric A, 1986. "The Economics of Schooling: Production and Efficiency in Public Schools," Journal of Economic Literature, American Economic Association, vol. 24(3), pages 1141-77, September.
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