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Choice and Competition in Education Markets

  • Patrick J. Bayer
  • Robert McMillan

This paper presents a new approach for measuring the effects of competition on school performance. We use an equilibrium sorting model to generate an intuitive measure of the competition each school faces, captured by the slope of the school’s demand curve. We then show that this competition measure is positively related to school performance using rich Census data: a one standard-deviation increase in competitiveness leads to a 0.1 standard-deviation performance improvement, controlling for a host of other factors. This positive performance relationship is consistent with strong supply responsiveness, relevant to the school choice debate.

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Paper provided by Duke University, Department of Economics in its series Working Papers with number 10-47.

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Length: 45
Date of creation: 2010
Date of revision:
Handle: RePEc:duk:dukeec:10-47
Contact details of provider: Postal: Department of Economics Duke University 213 Social Sciences Building Box 90097 Durham, NC 27708-0097
Phone: (919) 660-1800
Fax: (919) 684-8974
Web page: http://econ.duke.edu/

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