Offering a unifying theoretical perspective not readily available in any other text, this innovative guide to econometrics uses simple geometrical arguments to develop students' intuitive understanding of basic and advanced topics, emphasizing throughout the practical applications of modern theory and nonlinear techniques of estimation. One theme of the text is the use of artificial regressions for estimation, reference, and specification testing of nonlinear models, including diagnostic tests for parameter constancy, serial correlation, heteroscedasticity, and other types of mis-specification. Explaining how estimates can be obtained and tests can be carried out, the authors go beyond a mere algebraic description to one that can be easily translated into the commands of a standard econometric software package. Covering an unprecedented range of problems with a consistent emphasis on those that arise in applied work, this accessible and coherent guide to the most vital topics in econometrics today is indispensable for advanced students of econometrics and students of statistics interested in regression and related topics. It will also suit practising econometricians who want to update their skills. Flexibly designed to accommodate a variety of course levels, it offers both complete coverage of the basic material and separate chapters on areas of specialized interest.

Estimation and Inference in Econometrics

A central message of the tax competition literature is that independent governments engage in wasteful competition for scarce capital through reductions in tax rates and public expendi- ture levels. This paper discusses many of the contributions to this literature, ranging from early demonstrations of wasteful tax com- petition to more recent contributions that identify efficiency- enhancing roles for competition among governments. Such roles involve considerations not present in earlier models, including im- perfectly-competitive market structures, government commitment problems, and political economy considerations.

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Theories of Tax Competition

The relationship between school resources and student achievement has been controversial, in large part because it calls into question a variety of traditional policy approaches. This article reviews the available educational production literature, updating previous summaries. The close to 400 studies of student achievement demonstrate that there is not a strong or consistent relationship between student performance and school resources, at least after variations in family inputs are taken into account. These results are also reconciled with meta-analytic approaches and with other investigations on how school resources affect labor market outcomes. Simple resource policies hold little hope for improving student outcomes.

https://www.jstor.org/stable/pdf/1164207.pdf

Assessing the Effects of School Resources on Student Performance: An Update

Empirical analysis of peer effects on student achievement has been open to question because of the difficulties of separating peer effects from other confounding influences. While most econometric attention has been directed at issues of simultaneous determination of peer interactions, we argue that issues of omitted and mismeasured variables are likely to be more important. We control for the most important determinants of achievement that will confound peer estimates by removing student and school-by-grade fixed effects in addition to observable family and school characteristics. The analysis also addresses the reciprocal nature of peer interactions and the interpretation of estimates based upon models using past achievement as the measure of peer group quality. The results indicate that peer achievement has a positive effect on achievement growth. Moreover, students throughout the school test score distribution appear to benefit from higher achieving schoolmates. On the other hand, the variance in achievement appears to have no systematic effect. Copyright © 2003 John Wiley & Sons, Ltd.

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Does Peer Ability Affect Student Achievement

Peer effects are potentially important for understanding the optimal organization of schools, jobs, and neighborhoods, but finding evidence is difficult because people are selected into peer groups based, in part, on their unobservable characteristics. I identify the effects of peers whom a child encounters in the classroom using sources of variation that are credibly idiosyncratic, such as changes in the gender and racial composition of a grade in a school in adjacent years. I use specification tests, including one based on randomizing the order of years, to confirm that the variation I use is not generated by time trends or other non-idiosyncratic forces. I find that students are affected by the achievement level of their peers: a credibly exogenous change of 1 point in peers' reading scores raises a student's own score between 0.15 and 0.4 points, depending on the specification. Although I find little evidence that peer effects are generally non-linear, I do find that peer effects are stronger intra-race and that some effects do not operate through peers' achievement. For instance, both males and females perform better in math in classrooms that are more female despite the fact that females' math performance is about the same as that of males.

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Peer Effects in the Classroom: Learning from Gender and Race Variation

Many argue that the composition of a school or classroom-that is, the characteristics of the students themselves-affect the educational attainment of an individual student. This influence of the students in a classroom is often referred to as a peer effect. There have been few systematic studies that empirically examine the peer effect in the educational process. In this research, we examine the peer effect with a unique data set that includes individual student achievement scores and comprehensive characteristics of the students' families, teachers, other school characteristics, and peers for five countries. The data allow an examination of peer effects in both private and public schools in all countries. Our analysis indicates that peer effects are a significant determinant of educational achievement; the effects of peers appear to be greater for low-ability students than for high-ability students. The finding is robust across countries but not robust across school type. © 2000 by the Association for Public Policy Analysis and Management.

Peer effects in private and public schools across countries

The Determinants of Private School Attendance, 1970-1980

Production studies that have examined the relative performance of students in private and public schools typically find that the average student achievement in private schools exceeds that of the average student in public schools. The relatively small enrollment of students in private schools seriously limits policy predictions concerning the effects of vouchers and other policy reforms in the United States. The institutional arrangements for providing and funding schooling vary greatly across countries. This article examines these arrangements in five countries. Using a data set that measures achievement in mathematics, empirical results show that public funding and its subsequent effect of expanded enrollment in the private sector do not erase the superior performance of private schools relative to public ones. Government restrictions on private schools' decision-making powers can negate the superior performance of private schools.

Public Funding and Private Schooling across Countries

ECONOMIC analyses of political processes have been largely reserved for legislatures and bureaucratic agencies. The judicial branch of government has been subject to little positive analysis and has received almost no empirical focus. There is an interesting and important question concerning the relationship between the legislative and judicial branches of government. Do the legislative and judicial branches operate independently of one another or does the legislative branch influence the actions of the judiciary? Recent studies of particular bureaucratic agencies emphasize the control that Congress exercises over them through changes in budget allocations.1 Congress can use the budget as a device for signaling its own preferences and for rewarding or penalizing the agencies for their activities. To the extent the agency members value budgetary rewards, they will respond to the legislative signals by changing their behavior in the direction desired by the legislative body. The role of the budget as a signaling device has not been applied to the

Congressional Influence and the Supreme Court: The Budget as a Signaling Device

As school choice options have evolved over recent years, it is important to understand what family and school factors are associated with the enrollment decisions families make. Use of restricted-access data from the Early Childhood Longitudinal Study allowed us to identify household location from a nationally representative sample of students and to match households to the actual schools attended and other nearby schools. This matching is significant as previous research generally has not been able to link individual households to school enrollment decisions. Using these data, we examined the role that socioeconomic status, race, and ethnicity play in school enrollment decisions. One of our more interesting results suggests that the newest public alternative, charter schools, attracts families with higher socioeconomic status than those that traditional public schools attract. The attraction of charter schools, however, unlike traditional public schools, appears to be racially and ethnically neutral. Families do not choose a charter school because of its racial or ethnic composition, nor do race and ethnicity within a household influence its choice of charter schools. Other socioeconomic factors influencing charter school choice are more similar to factors explaining private school choice than to those factors explaining the choice of traditional public schools. The findings suggest that policies governing the design of charter schools should focus on broader socioeconomic diversity rather than race only. C � 2013 by the Association for Public Policy Analysis and Management.

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Eugenia Froedge Toma

Papers

Peer effects in private and public schools across countries

The Determinants of Private School Attendance, 1970-1980

Public Funding and Private Schooling across Countries

Congressional Influence and the Supreme Court: The Budget as a Signaling Device

Choice in a World of New School Types