A Test for Efficiency in the Supply of Local Public Education

Ted Bergstrom (), Judy Roberts, Dan Rubinfeld and Perry Shapiro

Papers from University of Michigan, Department of Economics

Abstract: This paper devises and applies a statistical test for efficient provision of local public education. The test is based on the ``Samuelson condition'' of equality between the sum of marginal rates of substitution and marginal cost. The econometric method is a micro-based approach to the estimation of the marginal rate of substitution function. This method accounts for possible ``Tiebout bias'' caused by the fact that individuals may choose their school districts in accordance with their tastes for education.

Date: 1988
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