A Test for Efficiency in the Supply of Local Public Education
with Judy Roberts, Dan Rubinfeld, Perry Shapiro, 1988

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.