Educational Quality, Communities, and Public School Choice: a Theoretical Analysis

Tarek Mostafa () and Saïd Hanchane ()
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Saïd Hanchane: LEST - Laboratoire d'Economie et de Sociologie du Travail - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique

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Abstract: In this paper, we develop a multicommunity model where public mixed finance and private schools coexist. Students are differentiated by income, ability and social capital. Schools maximize their profits under a quality constraint; the pricing function is dependent on the cost of producing education and on the position of an individual relatively to mean ability and mean social capital. Income plays an indirect role since it determines the type of schools and communities that can be afforded by a student given his ability and social capital. Three dimensional stratification results from schools' profit maximization and individuals' utility maximization. We study majority voting over tax rates; property tax is used to finance education not only in pure public schools but also in mixed finance schools. We provide the necessary conditions for the existence of a majority voting equilibrium determined by the median voter. Finally, we analyze the consequences of introducing public school choice.

Keywords: education market; majority voting equilibrium; peer group effects; social Capital; students; formation of communities; school choice (search for similar items in EconPapers)
Date: 2007-10-24
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00177630v2
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