Schooling inputs, property tax caps and effciency scores in public schools
(2013) , 29 pages
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- Abstract
- Using a data set comprised of public school districts in the state of Illinois, we examine the role of traditional \schooling inputs" and \non-schooling inputs" in the determination of test scores. Using recently developed nonparametric kernel methods, we are able to determine the relevance (or irrelevance) of many commonly used inputs in an educational production function. We nd that most commonly used `schooling inputs' (e.g., capital per pupil expenditure) are irrelevant in determining student test scores in our sample, even in a very general setting. For the relevant inputs, our ndings show that heterogeneous returns (which are allowed by our approach) are able to reconcile some of the insignicant or modest impacts of (non-schooling) inputs typically found in the literature. We further extend the existing analysis by developing an eciency estimator which allows for discrete inputs. Previous attempts in the literature have either used partially linear models, treated discrete inputs as continuous, ran separate regressions for each value of the discrete regressor or excluded them altogether. Our estimators (which use discrete kernels to incorporate discrete inputs) of the educational production function and technical eciency scores are consistent under standard assumptions and regularity conditions. In our application, we nd that the standard parametric estimators drastically underestimate the level of eciency. This is not only important from an econometric standpoint, but it may also be important for policy. If we believe that schools are underperforming, we may unnecessarily penalize schools, teachers and/or students. We fail to nd any evidence that school districts facing property tax caps operate more eciently so as to oset the negative eects of lack of resources on students' performance.
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Henderson, D., Simar, L., & Wang, L. (2013). Schooling inputs, property tax caps and effciency scores in public schools (ISBA Discussion paper 2013/13). https://hdl.handle.net/2078.5/205839