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Local School Finance and Productive Efficiency: Evidence from Ohio

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  • Joshua Hall

Abstract

This paper examines the relationship between local financing of education and school district efficiency. In a system of local school finance, the capitalization of school quality in housing prices provides homeowners with verifiable information regarding the impact of school officials’ actions and strong incentives to act upon that information. I find evidence that school districts with a higher percentage of revenues from local sources perform better on state math tests. In addition, the amount of residential property within a school district is positively related to math test passage rates. Copyright International Atlantic Economic Society 2007

Suggested Citation

  • Joshua Hall, 2007. "Local School Finance and Productive Efficiency: Evidence from Ohio," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 35(3), pages 289-301, September.
    • Handle: RePEc:kap:atlecj:v:35:y:2007:i:3:p:289-301
    DOI: 10.1007/s11293-007-9077-7
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    References listed on IDEAS

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    1. Hoxby, Caroline M., 1999. "The productivity of schools and other local public goods producers," Journal of Public Economics, Elsevier, vol. 74(1), pages 1-30, October.
    2. Haurin, Donald R. & Brasington, David, 1996. "School Quality and Real House Prices: Inter- and Intrametropolitan Effects," Journal of Housing Economics, Elsevier, vol. 5(4), pages 351-368, December.
    3. Southwick, Lawrence Jr & Gill, Indermit S., 1997. "Unified salary schedule and student SAT scores: Adverse effects of adverse selection in the market for secondary school teachers," Economics of Education Review, Elsevier, vol. 16(2), pages 143-153, April.
    4. David M. Brasington, 1999. "Which Measures of School Quality Does the Housing Market Value?," Journal of Real Estate Research, American Real Estate Society, vol. 18(3), pages 395-414.
    5. Victor R. Fuchs & Diane M. Reklis, 1994. "Mathematical Achievement in Eighth Grade: Interstate and Racial Differences," NBER Working Papers 4784, National Bureau of Economic Research, Inc.
    6. Donald Haurin & David Brasington, 1996. "The Impact of School Quality on Real House Prices: Interjurisdictional Effects," Working Papers 010, Ohio State University, Department of Economics.
    7. Peltzman, Sam, 1993. "The Political Economy of the Decline of American Public Education," Journal of Law and Economics, University of Chicago Press, vol. 36(1), pages 331-370, April.
    8. Fischel, William A., 2006. "The Courts and Public School Finance: Judge-Made Centralization and Economic Research," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.), Handbook of the Economics of Education, edition 1, volume 2, chapter 21, pages 1279-1325, Elsevier.
    9. Peltzman, Sam, 1996. "Political Economy of Public Education: Non-College-Bound Students," Journal of Law and Economics, University of Chicago Press, vol. 39(1), pages 73-120, April.
    10. Caroline Minter Hoxby, 1996. "Are Efficiency and Equity in School Finance Substitutes or Complements?," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 51-72, Fall.
    11. John Ruggiero, 2001. "Determining The Base Cost Of Education: An Analysis Of Ohio School Districts," Contemporary Economic Policy, Western Economic Association International, vol. 19(3), pages 268-279, July.
    12. Husted, Thomas A & Kenny, Lawrence W, 2000. "Evidence on the Impact of State Government on Primary and Secondary Education and the Equity-Efficiency Trade-Off," Journal of Law and Economics, University of Chicago Press, vol. 43(1), pages 285-308, April.
    13. Brasington, D. M., 2003. "The supply of public school quality," Economics of Education Review, Elsevier, vol. 22(4), pages 367-377, August.
    14. Hanushek, Eric A, 1986. "The Economics of Schooling: Production and Efficiency in Public Schools," Journal of Economic Literature, American Economic Association, vol. 24(3), pages 1141-1177, September.
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    Cited by:

    1. Hall, Joshua C., 2015. "Local Government Border Congruence and the Fiscal Commons: Evidence from Ohio School Districts," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 45(2).
    2. Joshua C. Hall & Donald J. Lacombe & Amir Neto & James Young, 2022. "Bayesian Estimation of the Hierarchical SLX Model with an Application to Housing Markets," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 46(2), pages 360-373, April.
    3. Joshua C. Hall & Donald J. Lacombe & Joylynn Pruitt, 2017. "Collective bargaining and school district test scores: evidence from Ohio bargaining agreements," Applied Economics Letters, Taylor & Francis Journals, vol. 24(1), pages 35-38, January.
    4. Amir B. Ferreira Neto & Joshua C. Hall, 2019. "Economies of scale and governance of library systems: evidence from West Virginia," Economics of Governance, Springer, vol. 20(3), pages 237-253, September.
    5. Joshua C. Hall & Donald J. Lacombe & Shree B. Pokharel, 2020. "State Exit Exams and Graduation Rates: A Hierarchical SLX Modelling Approach," The Review of Regional Studies, Southern Regional Science Association, vol. 50(2), pages 189-206.
    6. Richard J. Cebula & Joshua C. Hall & Maria Y. Tackett, 2017. "Non-public competition and public school performance: evidence from West Virginia," Applied Economics, Taylor & Francis Journals, vol. 49(12), pages 1185-1193, March.

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    More about this item

    Keywords

    School finance; Productive efficiency; Education; H71; H72; I22;
    All these keywords.

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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