School Competition

Question 1

Friedman 1995

Answer 1

school competition has efficient benefits
– If households have a choice, then they can discipline schools
– When a school performs badly, its students will leave
⇒ Schools will have an incentive to “perform well” to boost achievement w.r.t. academic outcomes

Question 2

Value Added

Answer 2

the difference between output and input
– the treatment effect on an outcome

Question 3

What is needed for consumers to make choices based on value added?

Answer 3

Consumers must
(a) Have information on value-added
(b) Care about the outcome along which we’re measuring VA
(c) Not face additional constraints on their choices

Question 4

Do people choose based on value added?

Answer 4

No according to Ainsworth 2023

Question 5

people often make choices based on exclusivity

Answer 5

this is because:
1. People care about exclusivity
2. People think that exclusivity is predictive of VA

Question 6

is competition likely to incentivize providers to invest in value added?