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

Maria Marta Ferreyra

American Economic Journal: Economic Policy, 2009, vol. 1, issue 1, pages 147-80

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)

Date: 2009
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