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Peer Preferences, School Competition, and the Effects of Public School Choice

Author

Listed:
  • Levon Barseghyan
  • Damon Clark
  • Stephen Coate

Abstract

This paper develops a new economic model of public school choice. The key innovation is to model competition between schools in an environment in which parents have peer preferences. The analysis yields three main findings. First, peer preferences dampen schools' incentives to exert effort in response to competitive pressure. Second, when peer preferences are sufficiently strong, choice can reduce social welfare. This is because choice is costly to exercise but aggregate peer quality is fixed. Third, given strong peer preferences, choice can reduce school quality in more affluent neighborhoods. We conclude that peer preferences weaken the case for choice.

Suggested Citation

  • Levon Barseghyan & Damon Clark & Stephen Coate, 2019. "Peer Preferences, School Competition, and the Effects of Public School Choice," American Economic Journal: Economic Policy, American Economic Association, vol. 11(4), pages 124-158, November.
    • Handle: RePEc:aea:aejpol:v:11:y:2019:i:4:p:124-58
    Note: DOI: 10.1257/pol.20170484
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    Citations

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    Cited by:

    1. Andrew Bibler & Stephen B. Billings & Stephen L. Ross, 2023. "Does School Choice Leave Behind Future Criminals?," Working papers 2023-02, University of Connecticut, Department of Economics.
    2. Marco Ovidi, 2022. "Parents Know Better: Sorting on Match Effects in Primary School," DISCE - Working Papers del Dipartimento di Economia e Finanza def121, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    3. Tobin, Zachary, 2024. "How do public schools respond to competition? Evidence from a charter school expansion," Economics of Education Review, Elsevier, vol. 99(C).
    4. Cohn, Ricardo Meilman, 2020. "Effects of public-school choice on private schools: Evidence from open enrollment reform," CLEF Working Paper Series 23, Canadian Labour Economics Forum (CLEF), University of Waterloo.
    5. Andrei Munteanu, 2024. "School Choice, Student Sorting and Academic Performance," Cahiers de recherche / Working Papers 2401, Chaire de recherche sur les enjeux économiques intergénérationnels / Research Chair in Intergenerational Economics.
    6. Bethencourt, Carlos & Kunze, Lars, 2022. "The economics of crime and socialization: The role of the family," Journal of Economic Behavior & Organization, Elsevier, vol. 197(C), pages 579-597.
    7. Marco Ovidi, 2021. "Parents know better: primary school choice and student achievement in London," Working Papers 919, Queen Mary University of London, School of Economics and Finance.

    More about this item

    JEL classification:

    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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