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School markets: The impact of information approximating schools' effectiveness

  • Mizala, Alejandra
  • Urquiola, Miguel

The impact of competition on school performance is likely to depend on whether parents are informed about schools' effectiveness or value added (which may or may not be correlated with absolute measures of their quality), and on whether this information influences their school choices, thereby affecting schools' market outcomes. This paper explores this by considering Chile's SNED program, which seeks to identify effective schools, selecting them from “homogeneous groups” of comparable institutions. Its results are widely disseminated, and the information it generates is different from that conveyed by a simple test-based ranking of schools (which turns out to approximate a ranking based on socioeconomic status). We use a sharp regression discontinuity to estimate the effect that being identified as a SNED winner has on schools' enrollment, tuition levels, and socioeconomic composition. Through five applications of the program, we find no consistent evidence that winning a SNED award affects these outcomes.

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Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 103 (2013)
Issue (Month): C ()
Pages: 313-335

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Handle: RePEc:eee:deveco:v:103:y:2013:i:c:p:313-335
Contact details of provider: Web page: http://www.elsevier.com/locate/devec

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  1. Alejandra Mizala & Pilar Romaguera & Miguel Urquiola, 2006. "Socioeconomic status or noise? Tradeoffs in the generation of school quality information," Documentos de Trabajo 225, Centro de Economía Aplicada, Universidad de Chile.
  2. Brunner, Eric & Sonstelie, Jon & Thayer, Mark, 2001. "Capitalization and the Voucher: An Analysis of Precinct Returns from California's Proposition 174," Journal of Urban Economics, Elsevier, vol. 50(3), pages 517-536, November.
  3. Derek Neal & Diane Whitmore Schanzenbach, 2007. "Left Behind By Design: Proficiency Counts and Test-Based Accountability," NBER Working Papers 13293, National Bureau of Economic Research, Inc.
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  5. Justine S. Hastings & Jeffrey M. Weinstein, 2008. "Information, School Choice, and Academic Achievement: Evidence from Two Experiments," The Quarterly Journal of Economics, MIT Press, vol. 123(4), pages 1373-1414, November.
  6. Justine S. Hastings & Thomas J. Kane & Douglas O. Staiger, 2005. "Parental Preferences and School Competition: Evidence from a Public School Choice Program," NBER Working Papers 11805, National Bureau of Economic Research, Inc.
  7. Abhijit Banerjee & Esther Duflo, 2006. "Addressing Absence," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 117-132, Winter.
  8. 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.
  9. Eric A. Hanushek, 1982. "Throwing money at schools," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 1(1), pages 19-41.
  10. MacLeod, Bentley, 2009. "Anti-Lemons: School Reputation and Educational Quality," Department of Economics, Working Paper Series qt3rc708kd, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  11. Justin McCrary, 2007. "Manipulation of the Running Variable in the Regression Discontinuity Design: A Density Test," NBER Technical Working Papers 0334, National Bureau of Economic Research, Inc.
  12. Hsieh, Chang-Tai & Urquiola, Miguel, 2006. "The effects of generalized school choice on achievement and stratification: Evidence from Chile's voucher program," Journal of Public Economics, Elsevier, vol. 90(8-9), pages 1477-1503, September.
  13. Guido Imbens & Thomas Lemieux, 2007. "Regression Discontinuity Designs: A Guide to Practice," NBER Working Papers 13039, National Bureau of Economic Research, Inc.
  14. Jesse M. Rothstein, 2006. "Good Principals or Good Peers? Parental Valuation of School Characteristics, Tiebout Equilibrium, and the Incentive Effects of Competition among Jurisdictions," American Economic Review, American Economic Association, vol. 96(4), pages 1333-1350, September.
  15. 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.
  16. Patrick Bayer & Fernando Ferreira & Robert McMillan, 2007. "A Unified Framework for Measuring Preferences for Schools and Neighborhoods," Journal of Political Economy, University of Chicago Press, vol. 115(4), pages 588-638, 08.
  17. Dante Contreras G. & Tomás Rau B., 2009. "Tournaments, gift exchanges, and the effect of monetary incentives for teachers: the case of Chile," Working Papers wp305, University of Chile, Department of Economics.
  18. Patrick Bayer & Robert McMillan, 2005. "Racial Sorting and Neighborhood Quality," NBER Working Papers 11813, National Bureau of Economic Research, Inc.
  19. Francisco Gallego & Andrés Hernando, 2009. "School Choice in Chile: Looking at the Demand Side," Documentos de Trabajo 356, Instituto de Economia. Pontificia Universidad Católica de Chile..
  20. Thomas J. Kane & Douglas O. Staiger, 2002. "The Promise and Pitfalls of Using Imprecise School Accountability Measures," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 91-114, Fall.
  21. Lee, David S. & Card, David, 2008. "Regression discontinuity inference with specification error," Journal of Econometrics, Elsevier, vol. 142(2), pages 655-674, February.
  22. Sandra E. Black, 1997. "Do better schools matter? Parental valuation of elementary education," Research Paper 9729, Federal Reserve Bank of New York.
  23. Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
  24. Kenneth Chay & Patrick J. McEwan & Miguel Urquiola, 2003. "The Central Role of Noise in Evaluating Interventions that Use Test Scores to Rank Schools," Discussion Papers 0304-10, Columbia University, Department of Economics.
  25. Brian A. Jacob, 2007. "Test-Based Accountability and Student Achievement: An Investigation of Differential Performance on NAEP and State Assessments," NBER Working Papers 12817, National Bureau of Economic Research, Inc.
  26. Bogart, William T. & Cromwell, Brian A., 1997. "How Much More is a Good School District Worth?," National Tax Journal, National Tax Association, vol. 50(2), pages 215-32, June.
  27. Wilbert van der Klaauw, 2002. "Estimating the Effect of Financial Aid Offers on College Enrollment: A Regression-Discontinuity Approach," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(4), pages 1249-1287, November.
  28. McCrary, Justin, 2008. "Manipulation of the running variable in the regression discontinuity design: A density test," Journal of Econometrics, Elsevier, vol. 142(2), pages 698-714, February.
  29. 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.
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