Choice and Competition in Education Markets

Patrick Bayer and Robert McMillan

No 10-47, Working Papers from Duke University, Department of Economics

Abstract: This paper presents a new approach for measuring the effects of competition on school performance. We use an equilibrium sorting model to generate an intuitive measure of the competition each school faces, captured by the slope of the school’s demand curve. We then show that this competition measure is positively related to school performance using rich Census data: a one standard-deviation increase in competitiveness leads to a 0.1 standard-deviation performance improvement, controlling for a host of other factors. This positive performance relationship is consistent with strong supply responsiveness, relevant to the school choice debate.

Keywords: Competition; School Choice; Sorting Model; Education Demand; School Performance (search for similar items in EconPapers)
JEL-codes: H41 I20 R21 (search for similar items in EconPapers)
Pages: 45
Date: 2010
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Citations: View citations in EconPapers (10)

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