Education Econ Exam 2

What are the two main problems motivating education policy reform?

Declining student performance and stagnant inequality by family background

What does the education production function represent?

How inputs are transformed into outputs

Define “Law of Diminishing Returns.”

Increasing inputs yields smaller additional gains in output

What is cost minimization in education?

Producing a given output at the lowest attainable cost

What is productive efficiency in schools?

Increasing inputs leads to greater outputs; schools use resources efficiently

What is school productivity

Student achievement per dollar spent after controlling for differences

three trends in school finance?

Fewer districts, more centralized funding, and higher total resources

three efficiency goals in school finance?

Allocative efficiency, productive efficiency, and equit

What is the Tiebout Model?

Families “vote with their feet,” moving to communities that best match their preferences for public goods like schools

What is capitalization in the Tiebout Model?

The quality of nearby schools is reflected in house prices.

What is foundation aid?

State guarantee of minimum spending per pupil through grants.

What is power equalization aid?

State grants allowing poor districts to match rich ones at the same tax rate.

What is the Hanushek critique?

More spending doesn’t automatically improve achievement; efficiency matters more than funding levels.

What are “leveling up” and “leveling down” in funding reform?

Leveling up raises low-income districts; leveling down reduces rich districts’ spending

What are the main forms of state aid?

Block grants (foundation) and matching grants (power equalization).

What was the effect of California’s school finance reforms?

Reduced inequality but also reduced overall funding levels.

What was Project STAR?

Tennessee’s experiment testing effects of smaller class sizes on performance

What were Project STAR’s key findings?

Smaller classes improved achievement, especially for minority and low-income students.

What are threats to internal validity in experiments like Project STAR?

Nonrandom attrition, Hawthorne effect, and nonrandom reassignment

What is a value-added (VA) measure?

A teacher’s contribution to student learning based on test score gains

What did the “Great Teaching Study” find?

High-VA teachers produce lasting benefits in education and earnings

What was the Holmstrom-Milgrom problem?

Teachers are evaluated on one skill (test scores) when many skills matter.

What are the main types of school choice?

Charter schools, magnet schools, vouchers, open enrollment, homeschooling

What is a charter school?

Publicly funded, independently run school with autonomy over curriculum.

What is a voucher program?

Public or private funding that allows students to attend private schools.

What is a magnet school?

Specialized school focusing on specific subjects or student types.

What is “cream skimming”?

When higher-achieving students leave public schools for choice schools

What are pros and cons of school choice?

Pros: efficiency, competition, better matching; Cons: segregation, inequality, specialization.

What are the three parts of accountability systems?

Expectations, assessments, and incentives (rewards/sanctions).

What did No Child Left Behind (NCLB) introduce?

Standardized testing, Adequate Yearly Progress (AYP), and penalties for low-performing schools

What was Race to the Top?

Competitive grant program rewarding test-based teacher evaluation.

What did Every Student Succeeds Act (ESSA) change?

Gave states more flexibility in setting standards and identifying low-performing schools

What is “teaching to the test”?

Focusing instruction narrowly on tested material to improve scores

What is the “race to the bottom”?

States lowering academic standards to meet federal benchmarks more easily

solution to design bias

randomized control trial

solution to time bias/unobserved differnces

DiD

solution to OVB

valid IV (or DiD)

solution to cutoff

regression discontinuity design (hard cutoff score)

solution to unchanging omitted variables

fixed effect (within test)

allocative efficency

most desired ( MB= MC)

productive efficency

lowest cost (cheapest)

allocative and productive efficency in questions

allocative: funding matches benefit

productive: school efficent given buget

pareto optimal

no one can be made better off without someone being made worse off

• must be allocative and productive efficent

voucher causes what for efficency

allocatively efficent because let people choose school that fit preferences

effect of partial vouchers

create peer effects based on preferences

relationship between property tax and grants

higher property tax = smaller the grant

capitalizartion effect

differences in taxes are reflected in property values

boston charter school evidence

flexibility + accountability = bigger educational gains (why charter schools better) 

misalgned incentives

overvalue less valued output

threshold effect

might try to cross threshold even if not valued

multiple principle agent problem

balance multiple demands/preferences

cheating vs coincidence solutions

• between class comparason

• time analysis

• retest 

• probability

matching grant equation

x=B- (s/2)

why lottery can be bias

oversubscibed schools are lotated usually urban population

external validity and threats

experiment can be broadly applied

threats:

hawthorne effect

self selection

internal validity and threats

experiment results are correct

threats:

time variation

faulty IV method

tiebout sorting assumptions

many communities

perfect mobility

informed