A test for efficiency in the supply of public education

This paper devises and applies a statistical test for efficient provision of local public education. The test is based on the `Samuelson condition' of equality between the sum of marginal rates of substitution and marginal cost. The econometric method is a micro-based approach to the estimation of the marginal rate of substitution function. This method accounts for possible `Tiebout bias' caused by the fact that individuals may choose their school districts in accordance with their tastes for education.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/27356/1/0000381.pd