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Strategic Competition Amongst Public Schools

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  • Daniel Millimet; Vasudha Rangaprasad
Abstract
Researchers, policymakers, and parents are giving education reforms involving expanded school choice increased attention. Many view the heightened competition that would presumably result from such reforms as a panacea for the ills currently plaguing the public education system in the US. However, the present system is not devoid of competition even absent such reforms; public schools compete for students through the Tiebout (1956) process. Thus, this papers seeks to answer two questions: (i) Does competition alter the behavior of public school districts? and (ii) Do public school districts compete with neighboring public school districts? To answer such questions, we utilize panel data from Illinois over the period 1990 � 2000 and estimate a multi-dimensional mixed regressive, spatial autoregressive model. We find robust evidence that public school districts incorporate the educational input decisions of other public school districts in the same county into their decision calculus, thereby acting strategically when setting own input levels

Suggested Citation

  • Daniel Millimet; Vasudha Rangaprasad, 2004. "Strategic Competition Amongst Public Schools," Econometric Society 2004 North American Summer Meetings 197, Econometric Society.
    • Handle: RePEc:ecm:nasm04:197
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    2. Fiva, Jon H. & Rønning, Marte, 2008. "The incentive effects of property taxation: Evidence from Norwegian school districts," Regional Science and Urban Economics, Elsevier, vol. 38(1), pages 49-62, January.
    3. David M. Brasington, 2007. "Public- and Private-School Competition: The Spatial Education Production Function," Springer Books, in: Toichiro Asada & Toshiharu Ishikawa (ed.), Time and Space in Economics, chapter 10, pages 175-203, Springer.
    4. David Card & Martin D. Dooley & A. Abigail Payne, 2010. "School Competition and Efficiency with Publicly Funded Catholic Schools," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 150-176, October.
    5. Edmark, Karin, 2007. "Strategic competition in Swedish local spending on childcare, schooling and care for the elderly," Working Paper Series 2007:22, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    6. Daniel J. Henderson & Léopold Simar & Le Wang, 2017. "The three s of public schools: irrelevant inputs, insufficient resources and inefficiency," Applied Economics, Taylor & Francis Journals, vol. 49(12), pages 1164-1184, March.
    7. Isen, Adam, 2014. "Do local government fiscal spillovers exist? Evidence from counties, municipalities, and school districts," Journal of Public Economics, Elsevier, vol. 110(C), pages 57-73.
    8. Patrick Bayer & Robert McMillan, 2005. "Choice and Competition in Local Education Markets," NBER Working Papers 11802, National Bureau of Economic Research, Inc.
    9. Lang, Corey & Prendergast, Patrick & Pearson-Merkowitz, Shanna, 2018. "How does municipal policy affect state and local actions? Evidence from land conservation spending," Resource and Energy Economics, Elsevier, vol. 54(C), pages 23-36.
    10. John V. Winters, 2011. "Teacher Salaries and Teacher Unions: A Spatial Econometric Approach," ILR Review, Cornell University, ILR School, vol. 64(4), pages 747-764, July.
    11. Daniel P. McMillen, 2010. "Issues In Spatial Data Analysis," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 119-141, February.
    12. Millimet, Daniel L., 2013. "Environmental Federalism: A Survey of the Empirical Literature," IZA Discussion Papers 7831, Institute of Labor Economics (IZA).
    13. H. Spencer Banzhaf & Garima Bhalla, 2012. "Do Households Prefer Small School Districts? A Natural Experiment," Southern Economic Journal, John Wiley & Sons, vol. 78(3), pages 819-841, January.
    14. Millimet, Daniel L. & Collier, Trevor, 2008. "Efficiency in public schools: Does competition matter?," Journal of Econometrics, Elsevier, vol. 145(1-2), pages 134-157, July.
    15. Marte Rønning & Jon Hernes Fiva, 2004. "Property Taxation as a Determinant of School District Efficiency," Working Paper Series 5105, Department of Economics, Norwegian University of Science and Technology, revised 14 Jul 2005.
    16. Jacob Fowles, 2016. "Salaries in Space," Public Finance Review, , vol. 44(4), pages 523-548, July.
    17. Mariel, Petr & Scarpa, Riccardo & Vega-Bayo, Ainhoa, 2018. "Joint parental school choice: Exploring the influence of individual preferences of husbands and wives," Regional Science and Urban Economics, Elsevier, vol. 68(C), pages 23-35.
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    More about this item

    Keywords

    School quality; School choice; Tiebout; Spatial autocorrelation;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • H4 - Public Economics - - Publicly Provided Goods
    • I2 - Health, Education, and Welfare - - Education

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