Public School Choice: An Economic Analysis

40 Pages Posted: 24 Nov 2014

See all articles by Levon Barseghyan

Levon Barseghyan

Cornell University

Damon Clark

University of California - Paul Merage School of Business - Economics/Health Care

Stephen Coate

Cornell University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: November 2014

Abstract

Public school choice programs give households a free choice of public school and provide schools incentives to compete for students. Proponents of these programs argue that by the usual market logic, choice and competition will improve the quality of the education that schools provide. Critics counter that the usual market logic does not translate easily to schools, since households’ perceptions of school quality depend not only on the efforts of school personnel but also on the composition of the student body (i.e., households have peer preferences). This paper advances this debate by developing and analyzing an economic model of public school choice. To capture the pro-choice argument, the model assumes that a neighborhood enrollment policy that provides schools with no incentives to exert effort is replaced by a prototypical public school choice policy in which households have a free choice of school and schools have incentives to compete for students. To capture the anti-choice argument the model assumes that households have peer preferences. The analysis of the equilibrium of this model generates three findings that highlight potential limitations of choice programs.

Suggested Citation

Barseghyan, Levon and Clark, Damon and Coate, Stephen, Public School Choice: An Economic Analysis (November 2014). NBER Working Paper No. w20701. Available at SSRN: https://ssrn.com/abstract=2529874

Levon Barseghyan (Contact Author)

Cornell University ( email )

Ithaca, NY 14853
United States

Damon Clark

University of California - Paul Merage School of Business - Economics/Health Care ( email )

Irvine, CA 92697-3125
United States

Stephen Coate

Cornell University - Department of Economics ( email )

414 Uris Hall
Ithaca, NY 14853-7601
United States
607-255-1912 (Phone)
607-205-2818 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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