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Strategic interaction among public school districts: Evidence on spatial interdependence in school inputs

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  • Ghosh, Soma

Abstract

This paper provides evidence on strategic interaction among public school districts in Massachusetts. The open enrollment program in Massachusetts is unique in testing the strategic competition thesis because it allows students to attend public schools located outside their home district. For each student who transfers out, funds are deducted from the sending district's local aid distribution and added to the receiving district's local aid. Thus, school districts no longer have the assurance of a ready supply of students and funding, instead they have to compete with neighboring districts, and enact strategies that will help retain as well as attract more students. A spatial econometric framework is applied to disentangle the correlation due to strategic interaction from the one that is simply due to spatially correlated error shocks. The results show that public school districts respond positively to the expenditure decisions of neighboring districts, thereby acting strategically when setting their own spending levels.

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  • Ghosh, Soma, 2010. "Strategic interaction among public school districts: Evidence on spatial interdependence in school inputs," Economics of Education Review, Elsevier, vol. 29(3), pages 440-450, June.
  • Handle: RePEc:eee:ecoedu:v:29:y:2010:i:3:p:440-450
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    References listed on IDEAS

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    1. repec:eee:regeco:v:65:y:2017:i:c:p:89-103 is not listed on IDEAS
    2. Jacob Fowles, 2016. "Salaries in Space," Public Finance Review, , vol. 44(4), pages 523-548, July.
    3. Gonzalez Canche, Manuel Sacramento, 2014. "Localized competition in the non-resident student market," Economics of Education Review, Elsevier, vol. 43(C), pages 21-35.
    4. Ivo Bischoff & Ferry Prasetyia, 2015. "Determinants of local public expenditures on education: empirical evidence for Indonesian districts between 2005 and 2012," MAGKS Papers on Economics 201532, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    5. Ivo Bischoff & Julia Hauschildt, 2017. "Vocational Schools as an Instrument of Interregional Competition – Empirical Evidence from German Counties," MAGKS Papers on Economics 201722, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

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