Competition, Incentives, and the Distribution of Investments in Private School Markets

Matias Tapia

No 387, Documentos de Trabajo from Instituto de Economia. Pontificia Universidad Católica de Chile.

Abstract: This paper develops a one-to-one matching model to analyze how different education funding regimes affect incentives and equilibrium allocations in competitive markets served by heterogeneous private providers. The main result is that alternative funding schemes change the relative incentives faced by schools with different productivities, dramatically altering equilibrium allocations and outcomes. The paper also explicitly characterizes equilibrium in markets served by for-profit and non-profit schools, an analysis that has not been made in previous literature. The basic version of the model is calibrated using data from Chile's education market and used to simulate the impact of alternative policy scenarios.

Keywords: Education funding; school competition; heterogeneous firms; for-profit and non-profit firms (search for similar items in EconPapers)
JEL-codes: D40 I21 I22 L33 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-com, nep-edu, nep-lab and nep-ure
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ioe:doctra:387

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