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AER - Previous Issues
 AER - September 2006

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American Economic Review

Vol. 96, No. 4, September 2006

Good Principals or Good Peers? Parental Valuation of School Characteristics, Tiebout Equilibrium, and the Incentive Effects of Competition among Jurisdictions
Jesse M. Rothstein

Article Citation
Rothstein, Jesse M. 2006. "Good Principals or Good Peers? Parental Valuation of School Characteristics, Tiebout Equilibrium, and the Incentive Effects of Competition among Jurisdictions." American Economic Review, 96(4): 1333–1350.
DOI:10.1257/aer.96.4.1333

Abstract
In a multicommunity model, high-income families cluster together in any equilibrium, and cluster near effective schools if effectiveness is an important component of community desirability. Governmental fragmentation facilitates this residential sorting. Thus, if parents prefer effective schools, income correlates with effectiveness in high-choice-market equilibrium. I examine the distribution of student background and test scores across schools within metropolitan areas that differ in the structure of educational governance. I find little indication of the ?effectiveness sorting? that is predicted if parents choose neighborhoods for the efficacy of the local schools. This suggests caution about the productivity implications of school choice policies. (JEL H73, I21, R21, R23)

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Authors
Rothstein, Jesse M.