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Competition Among Public Schools: A Reply to Rothstein (2004)


  • Caroline M. Hoxby


Rothstein has produced two comments, Rothstein (2003) and Rothstein (2004), on Hoxby "Does Competition Among Public Schools Benefit Students and Taxpayers," American Economic Review, 2000. In this paper, I discuss every claim of any importance in the comments. I show that every claim is wrong. I also discuss a number of Rothstein's innuendos--that is, claims that are made by implication rather than with the support of explicit arguments or evidence. I show that, when held up against the evidence, each innuendo proves to be false. One of the major points of Rothstein (2003) is that lagged school districts are a valid instrumental variable for today's school districts. This is not credible. Another major claim of Rothstein (2003) is that it is better to use highly non-representative achievement data based on students' self-selecting into test-taking than to use nationally representative achievement data. This claim is wrong for multiple reasons. The most important claim of Rothstein (2004) is that the results of Hoxby (2000) are not robust to including private school students in the sample. This is incorrect. While Rothstein appears merely to be adding private school students to the data, he actually substitutes error-prone data for error-free data on all students, generating substantial attenuation bias. He attributes the change in estimates to the addition of the private school students, but I show that the change in estimates is actually due to his using erroneous data for public school students. Another important claim in Rothstein (2004) that the results in Hoxby (2000) are not robust to associating streams with the metropolitan areas through which they flow rather than the metropolitan areas where they have their source. This is false: the results are virtually unchanged when the association is shifted from source to flow. Since 93.5 percent of streams flow only in the metropolitan area where they have their source, it would be surprising if the results did change much. The comments Rothstein (2003) and Rothstein (2004) are without merit. All of the data and code used in Hoxby (2000) are available to other researchers. An easy-to-use CD provides not only extracts and estimation code, but all of the raw data and the code for constructing the dataset.

Suggested Citation

  • Caroline M. Hoxby, 2005. "Competition Among Public Schools: A Reply to Rothstein (2004)," NBER Working Papers 11216, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:11216
    Note: ED CH

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    References listed on IDEAS

    1. repec:hrv:faseco:4553034 is not listed on IDEAS
    2. 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.
    3. Moffitt, Robert A., 1999. "New developments in econometric methods for labor market analysis," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 24, pages 1367-1397 Elsevier.
    4. Caroline Minter Hoxby, 1994. "Do Private Schools Provide Competition for Public Schools?," NBER Working Papers 4978, National Bureau of Economic Research, Inc.
    5. Alberto Alesina & Reza Baqir & Caroline Hoxby, 2004. "Political Jurisdictions in Heterogeneous Communities," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 348-396, April.
    6. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    7. 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.
    8. J.D. Angrist & Guido W. Imbens & D.B. Rubin, 1993. "Identification of Causal Effects Using Instrumental Variables," NBER Technical Working Papers 0136, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Etienne Wasmer, 2004. "The Economics of Prozac (Do Employees Really Gain from Employment Protection?)," Sciences Po publications 2460, Sciences Po.
    2. Blalock, Garrick & Gertler, Paul J., 2008. "Welfare gains from Foreign Direct Investment through technology transfer to local suppliers," Journal of International Economics, Elsevier, vol. 74(2), pages 402-421, March.
    3. Böhlmark, Anders & Lindahl, Mikael, 2007. "The Impact of School Choice on Pupil Achievement, Segregation and Costs: Swedish Evidence," IZA Discussion Papers 2786, Institute for the Study of Labor (IZA).
    4. Simon Burgess & Helen Slater, 2006. "Using Boundary Changes to Estimate the Impact of School Competition on Test Scores," The Centre for Market and Public Organisation 06/158, Department of Economics, University of Bristol, UK.
    5. Burgess, Simon & Briggs, Adam, 2010. "School assignment, school choice and social mobility," Economics of Education Review, Elsevier, vol. 29(4), pages 639-649, August.
    6. repec:spo:wpecon:info:hdl:2441/9042 is not listed on IDEAS

    More about this item

    JEL classification:

    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • I20 - Health, Education, and Welfare - - Education - - - General

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