Public Economics
Industrial Organization
Labor
Education Economics
Law and Economics

Public Economics
Industrial Organization
Labor
Education Economics
Law and Economics

Public Economics and Industrial Organization (Oral), 2000
Microeconomic and Macroeconomic Theory (Written), 1999

Charter Schools and the Structure of the Education Marketplace: Student Test Scores and Subsidies to Poor and Minority Communities

Professor Patrick Bayer
Professor Christopher Timmins
Professor Steven Berry

May 2004

Ph.D., Yale University, expected May 2004
M.Phil, Yale University, December 2001
M.A., Yale University, May 2000
M.A., Yale University, International and Development Economics, May 1998
B.A., University of California, Berkeley
Graduate Coursework in Mathematics and Economics, University of Hawaii

Yale University Dissertation Fellowship
Yale University Graduate Student Fellowship
Phi Beta Kappa
Kraft Scholarship Award
University/Departmental Honors
Association for Public Policy Analysis and Management (A.P.P.A.M.) Minority Fellowship
Graduate School of Public Policy, U.C. Berkeley (declined fellowship from RAND Institute/Harvard JFK School
    of Government)

Teaching Fellow, Intermediate Microeconomics (twice)
Teaching Fellow, Public Finance (undergraduate)
Teaching Fellow, Labor (undergraduate)

Research Assistant to Professor Patrick Bayer: Research in local public finance and urban economics

"Charter Schools and the Structure of the Education Marketplace: Effects on Student Test Scores from Actual and Potential Entry" (2003), job market paper

"Charter Schools and the Structure of the Education Marketplace: Effects on Student Test Scores from Subsidies to Poor and Minority Communities," in progress

"Modeling the Threat of Potential Entry: Applications to Antitrust and Real Estate Valuation," in progress

"School Based Management: Does Parental Involvement Improve Public Education?" (2001)

"Essays in Law and Economics," manuscript

Policy Analyst, State of Hawaii Senate Business Development Committee
Education Non-Profit Volunteer
Education Politics

Delivered Talk on Native Hawaiian Issues, Yale Center for International and Area Studies

My dissertation analyzes the structure, conduct, and performance of the education marketplace and is the first rigorous empirical study of entry by Charter Schools. Charter Schools receive public funding and autonomy from regulation in order to empower parents and educators to open new schools and implement decentralized local school choice and education reforms, with the idea of fostering competition that may improve the productivity of low-performing public schools. The Center for Education Reform (2002) estimated that 2700 Charters Schools serve 565,000 students in 37 states, which ranks Charter Schools as perhaps the most sweeping and rapidly expanding education reform in the US. I find statistically significant confirmation of the predictions from IO theory that under deregulated competition Charter Schools enter where there are "rents", i.e., low public school productivity, and the threat of potential entry in a contestable market significantly improves public school test scores in an entire metro area. The same model predicts the effects on test scores from subsidies to minority groups targeted by traditional affirmative action or the race-neutral alternative group of economically disadvantaged students, due to the increased probability of entry by Charter Schools in response to the subsidies. The study uses a unique dataset constructed using modern GIS software with precise distances between all schools from a region with among the strongest public policies in the U.S. to promote Charter Schools: Houston and Harris County, Texas. The methods can be employed in any state in the US because the campus-level aggregate data used in the study are commonly collected.

Supply/Entry is described by a logit model for location choices over census tracts using public school data with demographic and economic data from Census 2000. The results confirm statistically the prediction from standard IO theory that Charter School entry occurs in tracts where there are "rents", defined as tracts where too much taxpayer money is spent on public schools with consistently low student achievement. This finding is fundamental to the claim that public schools may improve due to competition from Charter Schools. An aggregate demand function is specified in order to predict demand for Charter Schools, and estimated demand exhibits many statistically significant coefficients consistent with the initial entry logit model: students are more likely to attend a Charter Schools if their public school has low test scores, high student-teacher ratios, and yet low productivity defined as high per pupil expenditures. Both supply/entry and demand are confirmed to be highly local, indicating the importance of spatial differentiation via location choice to understanding the market for Charter Schools.

Model for Education Policy Analysis. Predicted aggregate demand serves as a proxy for revenues and Census 2000 variables proxy for costs in a reduced form value function for entry which measures the profitability of choices in a logit model that yields a probability of entry into every census tract in greater Houston. The probability of entry is used as a measure of the threat of potential entry, which can then be related to changes in any test scores for any type of student in any public school in the region of Houston, in the process testing alternative IO theories of market structure, such as globally "contestable markets" versus local strategic interactions as in Fudenberg and Tirole (1984). Preliminary results show that even without government regulation the threat of entry significantly improves standardized test scores of public schools not only in the tract where actual entry is observed but also in hundreds of other tracts in the metro area - a powerful and important result consistent with IO theory of contestable markets. Furthermore, the model of aggregate demand permits calculation of demand by different types of students in any location in the metro area, which can be combined with any level of subsidy for those groups along with cost data, such as median rent from Census 2000, into a structural profit function that models preferences for serving various types of students, which then can be used in a logit model that predicts the probability of entry into any census tract and the effects on test scores for poor or minority communities. For example, subsidies based on affirmative action policies directed towards minority groups can be compared with the race-neutral alternative of subsidizing economically disadvantaged students, and test score changes can then be predicted for any group of students in the metro area.