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School Choice: Traditional Mechanisms and Extending the Poor's Ability to Choose

  • Sinan Sarpça

    ()

    (Department of Economics, Koç University)

  • Kuzey Yılmaz

    (Department of Economics, Koç University)

  • Eric Hanushek

    (Stanford University)

We develop a multi-community urban land use framework to investigate the implications of increasing school choice opportunities on educational and residential choices of a city's residents. When deciding on the location and the size of land, the households care about the distance to the business district, and a local public good: education. There is a private education alternative that breaks the link between choosing a residence area and choosing a school. The households differ in their incomes and preferences for education. In five models that differ in various aspects of choice and financing, we study the housing and education choices of the city residents, and the endogenously determined education provision levels in equilibrium. The results of the article support reformist arguments: We ¯rst show that the presence of a private alternative benefits every household, whereas school district consolidation hurts everyone. We then examine two policies that aim to increase choice. An untargeted local government support (financed by property taxes) that can be used at the private school can improve things for talented poor. A policy that supports the talented poor (using city income taxes) with funds that can be used for public as well as private schools can also improve welfare of all talented students, rich or poor.

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File URL: http://eaf.ku.edu.tr/sites/eaf.ku.edu.tr/files/erf_wp_0709.pdf
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Paper provided by Koc University-TUSIAD Economic Research Forum in its series Koç University-TUSIAD Economic Research Forum Working Papers with number 0709.

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Length: 33 pages
Date of creation: Sep 2007
Date of revision:
Handle: RePEc:koc:wpaper:0709
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  1. Dennis Epple & Richard Romano, 2008. "Educational Vouchers And Cream Skimming," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1395-1435, November.
  2. Fernandez, Raquel & Rogerson, Richard, 1996. "Income Distribution, Communities, and the Quality of Public Education," The Quarterly Journal of Economics, MIT Press, vol. 111(1), pages 135-64, February.
  3. Epple, Dennis & Platt, Glenn J., 1998. "Equilibrium and Local Redistribution in an Urban Economy when Households Differ in both Preferences and Incomes," Journal of Urban Economics, Elsevier, vol. 43(1), pages 23-51, January.
  4. Rangazas, Peter, 1995. " Vouchers and Voting: An Initial Estimate Based on the Median Voter Model," Public Choice, Springer, vol. 82(3-4), pages 261-79, March.
  5. Charles Ka-Yui Leung, 2004. "Macroeconomics and Housing: A Review of the Literature," Departmental Working Papers _164, Chinese University of Hong Kong, Department of Economics.
  6. Eric A. Hanushek, 2002. "The Failure of Input-based Schooling Policies," NBER Working Papers 9040, National Bureau of Economic Research, Inc.
  7. Eric A. Hanushek & John F. Kain & Jacob M. Markman & Steven G. Rivkin, 2001. "Does Peer Ability Affect Student Achievement?," NBER Working Papers 8502, National Bureau of Economic Research, Inc.
  8. Manski, Charles F., 1992. "Educational choice (vouchers) and social mobility," Economics of Education Review, Elsevier, vol. 11(4), pages 351-369, December.
  9. Thomas J. Nechyba, 2000. "Mobility, Targeting, and Private-School Vouchers," American Economic Review, American Economic Association, vol. 90(1), pages 130-146, March.
  10. Hanushek, Eric A. & Kain, John F. & Rivkin, Steven G., 2004. "Disruption versus Tiebout improvement: the costs and benefits of switching schools," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1721-1746, August.
  11. de Bartolome, Charles A. M. & Ross, Stephen L., 2003. "Equilibria with local governments and commuting: income sorting vs income mixing," Journal of Urban Economics, Elsevier, vol. 54(1), pages 1-20, July.
  12. Caroline M. Hoxby, 2001. "All School Finance Equalizations Are Not Created Equal," The Quarterly Journal of Economics, MIT Press, vol. 116(4), pages 1189-1231, November.
  13. Erik Hanushek & F. Welch (ed.), 2006. "Handbook of the Economics of Education," Handbook of the Economics of Education, Elsevier, edition 1, volume 1, number 1, June.
  14. Erik Hanushek & F. Welch (ed.), 2006. "Handbook of the Economics of Education," Handbook of the Economics of Education, Elsevier, edition 1, volume 2, number 2, June.
  15. Cohen-Zada, Danny & Justman, Moshe, 2005. "The religious factor in private education," Journal of Urban Economics, Elsevier, vol. 57(3), pages 391-418, May.
  16. 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.
  17. Dennis Epple & Richard Romano, 2000. "Neighborhood Schools, Choice, and the Distribution of Educational Benefits," NBER Working Papers 7850, National Bureau of Economic Research, Inc.
  18. Epple, Dennis & Nechyba, Thomas, 2004. "Fiscal decentralization," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 55, pages 2423-2480 Elsevier.
  19. Hoyt, William H. & Lee, Kangoh, 1998. "Educational vouchers, welfare effects, and voting," Journal of Public Economics, Elsevier, vol. 69(2), pages 211-228, June.
  20. Ellickson, Bryan, 1973. "A Generalization of the Pure Theory of Public Goods," American Economic Review, American Economic Association, vol. 63(3), pages 417-32, June.
  21. Nechyba, Thomas J, 1999. " School Finance Induced Migration and Stratification Patterns: The Impact of Private School Vouchers," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 1(1), pages 5-50.
  22. Elizabeth M. Caucutt, 2002. "Educational Vouchers When There Are Peer Group Effects--Size Matters," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(1), pages 195-222, February.
  23. Hanushek, Eric & Yilmaz, Kuzey, 2007. "The complementarity of Tiebout and Alonso," Journal of Housing Economics, Elsevier, vol. 16(2), pages 243-261, June.
  24. Epple, Dennis & Filimon, Radu & Romer, Thomas, 1984. "Equilibrium among local jurisdictions: toward an integrated treatment of voting and residential choice," Journal of Public Economics, Elsevier, vol. 24(3), pages 281-308, August.
  25. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416.
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