American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Good Principals or Good Peers? Parental Valuation of School Characteristics, Tiebout Equilibrium, and the Incentive Effects of Competition among Jurisdictions
American Economic Review
vol. 96,
no. 4, September 2006
(pp. 1333–1350)
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)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.96.4.1333Additional Materials
JEL Classification
- H73 State and Local Government; Intergovernmental Relations: Interjurisdictional Differentials and Their Effects
- I21 Analysis of Education
- I28 Education: Government Policy