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Does Competition Among Public Schools Benefit Students and Taxpayers? A Comment on Hoxby (2000)

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  • Jesse Rothstein

Abstract

In an influential paper, Hoxby (2000) studies the relationship between the degree of so-called "Tiebout choice" among local school districts within a metropolitan area and average test scores. She argues that choice is endogenous to school quality, and instruments with the number of larger and smaller streams. She finds a large positive effect of choice on test scores, which she interprets as evidence that school choice induces greater school productivity. This paper revisits Hoxby's analysis. I document several important errors in Hoxby's data and code. I also demonstrate that the estimated choice effect is extremely sensitive to the way that "larger streams" are coded. When Hoxby's hand count of larger streams is replaced with any of several alternative, easily replicable measures, there is no significant difference between IV and OLS, each of which indicates a choice effect near zero. There is thus little evidence that schools respond to Tiebout competition by raising productivity. A data appendix for this paper is available online

Suggested Citation

  • Jesse Rothstein, 2005. "Does Competition Among Public Schools Benefit Students and Taxpayers? A Comment on Hoxby (2000)," NBER Working Papers 11215, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:11215
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    References listed on IDEAS

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    1. Caroline M. Hoxby, 2000. "Does Competition among Public Schools Benefit Students and Taxpayers?," American Economic Review, American Economic Association, vol. 90(5), pages 1209-1238, December.
    2. Moulton, Brent R., 1986. "Random group effects and the precision of regression estimates," Journal of Econometrics, Elsevier, vol. 32(3), pages 385-397, August.
    3. Caroline Hoxby & M. Daniele Paserman, 1998. "Overidentification Tests with Grouped Data," NBER Technical Working Papers 0223, National Bureau of Economic Research, Inc.
    4. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
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    Citations

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    Cited by:

    1. Lori L. Taylor, 2010. "Competition And Teacher Pay," Economic Inquiry, Western Economic Association International, vol. 48(3), pages 603-620, July.
    2. Bjerk, David, 2010. "Thieves, thugs, and neighborhood poverty," Journal of Urban Economics, Elsevier, vol. 68(3), pages 231-246, November.
    3. David M. Brasington, 2005. "Public and Private School Competition: The Spatial Education Production Function," Departmental Working Papers 2005-09, Department of Economics, Louisiana State University.
    4. repec:mpr:mprres:7443 is not listed on IDEAS
    5. Joëlle Noailly & SunÄica VujiÄ & Ali Aouragh, 2012. "The effects of competition on the quality of primary schools in the Netherlands," Environment and Planning A, Pion Ltd, London, vol. 44(9), pages 2153-2170, September.
    6. Gallego Francisco, 2013. "When Does Inter-School Competition Matter? Evidence from the Chilean “Voucher” System," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 13(2), pages 525-562, August.
    7. Oliver Himmler, 2009. "The Effects of School Competition on Academic Achievement and Grading Standards," CESifo Working Paper Series 2676, CESifo Group Munich.
    8. Loeb, Susanna & Valant, Jon & Kasman, Matt, 2011. "Increasing Choice in the Market for Schools: Recent Reforms and Their Effects on Student Achievement," National Tax Journal, National Tax Association;National Tax Journal, vol. 64(1), pages 141-163, March.
    9. Caroline M. Hoxby, 2005. "Competition Among Public Schools: A Reply to Rothstein (2004)," NBER Working Papers 11216, National Bureau of Economic Research, Inc.
    10. Victor Lavy, 2006. "From Forced Busing to Free Choice in Public Schools: Quasi-Experimental Evidence of Individual and General Effects," NBER Working Papers 11969, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • I2 - Health, Education, and Welfare - - Education
    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis

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