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American Economic Journal: Economic Policy: Vol. 1 No. 1 (February 2009)

AEJ: Policy Volume. 1, Issue 1 | Previous ArticleNext Article

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An Empirical Framework for Large-Scale Policy Analysis, with an Application to School Finance Reform in Michigan

Article Citation

Ferreyra, Maria Marta. 2009. "An Empirical Framework for Large-Scale Policy Analysis, with an Application to School Finance Reform in Michigan." American Economic Journal: Economic Policy, 1(1): 147-80.

DOI: 10.1257/pol.1.1.147

Abstract

In this paper, I develop an empirical framework for the analysis of large-scale policies, and apply it to study the effects of school finance reform on the Detroit metropolitan area. Exploiting school finance reform in Michigan in 1994, I estimate a general equilibrium model of multiple jurisdictions with 1990 data from Detroit, predict the 2000 equilibrium, and compare this prediction with 2000 data to validate the model. I conduct counterfactual simulations using the estimates. According to my analysis, feasible revenue-based reforms that ensure spending equity or adequacy have little impact on school quality or household demographics in Detroit. (JEL H75, I22)

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Authors

Ferreyra, Maria Marta (Carnegie Mellon U)

JEL Classifications

H75: State and Local Government: Health, Education, and Welfare
I22: Educational Finance

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