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Essays on Market-Based Provision of Local Public Services

Abstract

This dissertation comprises three self-contained essays. Each essay uses administrative data collected by state and local governments to evaluate a market-based innovation in the delivery of local public services. Chapters 1 and 2 explore school choice programs that were implemented in the state of Indiana starting around 2008, while Chapter 3 is a national study of homeowners associations.

In Chapter 1, student-level standardized test scores are studied to characterize the joint effectiveness of three forms of school choice---public charter schools, private school vouchers, and inter-district open enrollment. Average test scores of all students residing in a school district are shown to improve when the share of students enrolled through one of these options increases.

Chapter 2 narrows the focus to a single school choice policy---inter-district open enrollment. Prior studies show that compelling public schools to enroll non-resident students weakens housing demand in communities with good schools, lowering their home prices. Indiana's policy of allowing public schools the option to enroll non-resident students does not exhibit the same relationship, possibly because schools selectively participate based on the local price elasticity of demand for housing (i.e., the responsiveness of local house prices to changes in demand).

Chapter 3 demonstrates how to detect homeowners associations across most of the country using mortgage riders documented in public real estate records. These private neighborhood governments are shown to involve a fifth of all single-family houses in the U.S. and 80 percent of houses in recently-built subdivisions. Houses with a homeowners association are estimated to cost 4 percent more than nearby similar homes with no homeowners association.

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