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A Test for Efficiency in the Supply of Local Public Education

  • Ted Bergstrom

    ()

    (University of Michigan, Economic)

  • Judy Roberts
  • Dan Rubinfeld
  • Perry Shapiro

This paper devises and applies a statistical test for efficient provision of local public education. The test is based on the ``Samuelson condition'' of equality between the sum of marginal rates of substitution and marginal cost. The econometric method is a micro-based approach to the estimation of the marginal rate of substitution function. This method accounts for possible ``Tiebout bias'' caused by the fact that individuals may choose their school districts in accordance with their tastes for education.

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File URL: http://www.econ.ucsb.edu/~tedb/PubFin/pubtest.ps
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Paper provided by University of Michigan, Department of Economics in its series Papers with number _036.

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Date of creation: 1988
Date of revision:
Handle: RePEc:wop:michec:_036
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Web page: http://www.econ.lsa.umich.edu/

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  1. Barlow, Robin, 1970. "Efficiency Aspects of Local School Finance," Journal of Political Economy, University of Chicago Press, vol. 78(5), pages 1028-40, Sept.-Oct.
  2. Bergstrom, Theodore C & Rubinfeld, Daniel L & Shapiro, Perry, 1982. "Micro-Based Estimates of Demand Functions for Local School Expenditures," Econometrica, Econometric Society, vol. 50(5), pages 1183-1205, September.
  3. Bergstrom, Ted C, 1979. " When Does Majority Rule Supply Public Goods Efficiently?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 81(2), pages 216-26.
  4. John Ledyard, 1983. "The Pure Theory of Large Two Candidate Elections," Discussion Papers 569, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  5. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January.
  6. Bewley, Truman F, 1981. "A Critique of Tiebout's Theory of Local Public Expenditures," Econometrica, Econometric Society, vol. 49(3), pages 713-40, May.
  7. Brennan,Geoffrey & Buchanan,James M., 1980. "The Power to Tax," Cambridge Books, Cambridge University Press, number 9780521233293.
  8. Gramlich, Edward M & Rubinfeld, Daniel L, 1982. "Micro Estimates of Public Spending Demand Functions and Tests of the Tiebout and Median-Voter Hypotheses," Journal of Political Economy, University of Chicago Press, vol. 90(3), pages 536-60, June.
  9. Shapiro, Perry & Sonstelie, Jon, 1982. "Did Proposition 13 Slay Leviathan?," American Economic Review, American Economic Association, vol. 72(2), pages 184-90, May.
  10. Courant, Paul N & Gramlich, Edward M & Rubinfeld, Daniel L, 1979. "Public Employee Market Power and the Level of Government Spending," American Economic Review, American Economic Association, vol. 69(5), pages 806-17, December.
  11. Joseph E. Stiglitz, 1982. "The Theory of Local Public Goods Twenty-Five Years After Tiebout: A Perspective," NBER Working Papers 0954, National Bureau of Economic Research, Inc.
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