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Choice and Competition in Education Markets

Author

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  • Patrick J. Bayer
  • Robert McMillan

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.

Suggested Citation

  • Patrick J. Bayer & Robert McMillan, 2010. "Choice and Competition in Education Markets," Working Papers 10-47, Duke University, Department of Economics.
    • Handle: RePEc:duk:dukeec:10-47
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    Citations

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    Cited by:

    1. Hazans, Mihails, 2010. "Teacher Pay, Class Size and Local Governments: Evidence from the Latvian Reform," IZA Discussion Papers 5291, Institute of Labor Economics (IZA).
    2. Akyol, Metin, 2016. "Do educational vouchers reduce inequality and inefficiency in education?," Economics of Education Review, Elsevier, vol. 55(C), pages 149-167.
    3. Stephen Gibbons & Sandra McNally & Martina Viarengo, 2018. "Does Additional Spending Help Urban Schools? An Evaluation Using Boundary Discontinuities," Journal of the European Economic Association, European Economic Association, vol. 16(5), pages 1618-1668.
    4. Caetano, Gregorio & Maheshri, Vikram, 2017. "School segregation and the identification of tipping behavior," Journal of Public Economics, Elsevier, vol. 148(C), pages 115-135.
    5. H. Spencer Banzhaf & Garima Bhalla, 2012. "Do Households Prefer Small School Districts? A Natural Experiment," Southern Economic Journal, John Wiley & Sons, vol. 78(3), pages 819-841, January.
    6. Friesen, Jane & Harris, Benjamin Cerf & Woodcock, Simon, 2013. "Open Enrolment and Student Achievement," CLSSRN working papers clsrn_admin-2013-46, Vancouver School of Economics, revised 22 Mar 2014.

    More about this item

    Keywords

    Competition; School Choice; Sorting Model; Education Demand; School Performance;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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