Working Paper: NBER ID: w11215
Authors: Jesse Rothstein
Abstract: In an influential paper, Hoxby (2000) studies the relationship between the degree of so-called "Tiebout choice" among local school districts within a metropolitan area and average test scores. She argues that choice is endogenous to school quality, and instruments with the number of larger and smaller streams. She finds a large positive effect of choice on test scores, which she interprets as evidence that school choice induces greater school productivity. This paper revisits Hoxby's analysis. I document several important errors in Hoxby's data and code. I also demonstrate that the estimated choice effect is extremely sensitive to the way that "larger streams" are coded. When Hoxby's hand count of larger streams is replaced with any of several alternative, easily replicable measures, there is no significant difference between IV and OLS, each of which indicates a choice effect near zero. There is thus little evidence that schools respond to Tiebout competition by raising productivity.
Keywords: school choice; Tiebout competition; educational outcomes; instrumental variables
JEL Codes: H7; I2; R5
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Tiebout choice (H73) | school productivity (I21) |
| school productivity (I21) | student achievement (I24) |
| school choice (I21) | academic outcomes (I21) |
| Tiebout choice (H73) | educational outcomes (I26) |
| larger streams (Q25) | Tiebout choice (H73) |
| smaller streams (Q25) | Tiebout choice (H73) |