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Nechyba, T. J., (2003)
‘Introducing School Choice into Multidistrict Public School Systems’
in Hoxby, C. (ed.), The Economics of School Choice,
University of Chicago Press
- A theoretical paper developing a general equilibrium model to predict
the impact of major school vouchers programs on – school quality,
the housing market, segregation by income, and taxation.
- Uses observable
outcomes from the current system in New Jersey (which does not have
a voucher scheme) to calibrate the model, then simulates
several different voucher programs.
Key results:
- Two opposing effects emerge as vouchers are introduced -
1. A price incentive for private-school attending households to settle
in the poorest district (where housing is cheaper), raising average
income in that district.
2. A narrowing of inter-district housing price differences (as more
private school households settle in poor district) reducing the price
incentive to live in the poorest district.
- Under the assumption that
public schools respond to competition by raising productivity, vouchers
lead to increased public school
quality, increased overall average school quality, and variance
in education outcomes falls.
- Under the (pessimistic) assumption that
public schools do not respond to competition, vouchers still have
only a modest negative
impact
on public school quality.
- Since, in the absence of vouchers, school
quality is capitalised into house prices, the introduction of vouchers
leads to capital
losses for homeowners in the richest districts.
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