We argue that the lack of academic proficiency in K-12 education is due to information asymmetry between the policy-maker, households, and schools. The policy-maker is thus unable to write down efficient contracts to ensure proficiency, and must incur agency costs which, in turn, generate other...

We develop a theoretical and computational model of equilibrium school choice and achievement that embeds information asymmetries in the production of education. School effort is unobservable to households and the policy-maker, leading to moral hazard problems. Although households can monitor...

In this paper I develop an empirical framework for the analysis of large-scale policies, and apply it to study the effects of Michigan’s 1994 school finance reform on the Detroit metropolitan area. The framework includes estimating a general equilibrium model of multiple jurisdictions with...

We develop a theoretical and computational model of school choice and achievement that embeds information asymmetries in the provision of education. Because school effort is unobservable to households and policymakers, schools have an incentive to under provide effort. This moral hazard affects...

In this paper, I develop an empirical framework for the analysis of large-scale policies, and apply it to study the effects of school finance reform on the Detroit metropolitan area. Exploiting school finance reform in Michigan in 1994, I estimate a general equilibrium model of multiple...

In 1994 the state of Michigan implemented one of the most comprehensive school finance reforms undertaken to date in any of the states. Understanding the effects of the reform is thus of value in informing other potential reform initiatives. In addition, the reform and associated changes in the...

This paper estimates a general equilibrium model of school quality and household residential and school choice for economies with multiple public school districts and private (religious and nonsectarian) schools. The estimates, obtained through full-solution methods, are used to simulate two...

In 1994 the state of Michigan implemented one of the most comprehensive school finance reforms undertaken to date in any of the states. Understanding the effects of the reform is thus of value in informing other potential reform initiatives. In addition, the reform and associated changes in the...

The quantal response equilibrium (QRE) notion of McKelvey and Palfrey (1995) has recently attracted considerable attention, due in part to its widely documented ability to rationalize observed behavior in games played by experimental subjects. However, even with strong a priori restrictions on...