TY - JOUR AU - Rothstein,Jesse TI - Does Competition Among Public Schools Benefit Students and Taxpayers? A Comment on Hoxby (2000) JF - National Bureau of Economic Research Working Paper Series VL - No. 11215 PY - 2005 Y2 - March 2005 DO - 10.3386/w11215 UR - http://www.nber.org/papers/w11215 L1 - http://www.nber.org/papers/w11215.pdf N1 - Author contact info: Jesse Rothstein Goldman School of Public Policy and Department of Economics University of California, Berkeley 2607 Hearst Avenue Berkeley, CA 94720-7320 Tel: 510/643-8561 Fax: 510/643-9657 E-Mail: email@example.com AB - 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.
A data appendix for this paper is available online ER -