Economics and Finance Faculty Publications and Presentations
Document Type
Article
Publication Date
12-29-2017
Abstract
Some education policy studies suggest that consolidation of public school districts saves resources. However, endogeneity in cost models would result in incorrect estimates of the effects of consolidation. We use a new stochastic frontier methodology to examine district expenditures while handling endogeneity. Using the data from California, we find that the effects of student achievement and education market concentration on expenditure per pupil are substantially larger when endogeneity is handled. Our findings are robust to concerns such as instrumental variable adequacy and spatial interactions. Our consolidation simulations indicate that failure to address endogeneity can result in unrealistic expectations of savings.
Recommended Citation
Karakaplan, Mustafa U., and Levent Kutlu. “School District Consolidation Policies: Endogenous Cost Inefficiency and Saving Reversals.” Empirical Economics 56, no. 5 (December 29, 2017): 1729–68. https://doi.org/10.1007/s00181-017-1398-z.
First Page
1729
Last Page
1768
Publication Title
Empirical Economics
DOI
10.1007/s00181-017-1398-z
Included in
Educational Assessment, Evaluation, and Research Commons, Education Economics Commons, Finance Commons
Comments
Original published version available at https://doi.org/10.1007/s00181-017-1398-z