Does Competition Among Public Schools Benefit Students and Taxpayers? A Comment on Hoxby (2000)

Jesse Rothstein

No 11215, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In an influential paper, Hoxby (2000) studies the relationship between the degree of so-called "Tiebout choice" among local school districts within a metropolitan area and average test scores. She argues that choice is endogenous to school quality, and instruments with the number of larger and smaller streams. She finds a large positive effect of choice on test scores, which she interprets as evidence that school choice induces greater school productivity. This paper revisits Hoxby's analysis. I document several important errors in Hoxby's data and code. I also demonstrate that the estimated choice effect is extremely sensitive to the way that "larger streams" are coded. When Hoxby's hand count of larger streams is replaced with any of several alternative, easily replicable measures, there is no significant difference between IV and OLS, each of which indicates a choice effect near zero. There is thus little evidence that schools respond to Tiebout competition by raising productivity.

JEL-codes: H7 I2 R5 (search for similar items in EconPapers)
Date: 2005-03
New Economics Papers: this item is included in nep-geo, nep-pbe and nep-ure
Note: CH ED
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Citations: View citations in EconPapers (17)

Published as "Does Competition Among Public Schools Benefit Students and Taxpayers? A Comment on Hoxby (2000)." American Economic Review 97(5), December 2007, pp. 2026-2037.

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