An Empirical Framework for Large-Scale Policy Analysis, with an Application to School Finance Reform in Michigan | Zendy

María Marta Ferreyra | Zendy

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An Empirical Framework for Large-Scale Policy Analysis, with an Application to School Finance Reform in Michigan

Author(s) -

María Marta Ferreyra

Publication year - 2009

Publication title -

american economic journal economic policy

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 7.868

H-Index - 62

eISSN - 1945-7731

pISSN - 1945-774X

DOI - 10.1257/pol.1.1.147

Subject(s) - counterfactual thinking , equity (law) , metropolitan area , demographics , scale (ratio) , economics , revenue , public economics , policy analysis , finance , econometrics , actuarial science , political science , public administration , geography , sociology , philosophy , demography , cartography , archaeology , epistemology , law

In this paper, I develop an empirical framework for the analysis of large-scale policies, and apply it to study the effects of school finance reform on the Detroit metropolitan area. Exploiting school finance reform in Michigan in 1994, I estimate a general equilibrium model of multiple jurisdictions with 1990 data from Detroit, predict the 2000 equilibrium, and compare this prediction with 2000 data to validate the model. I conduct counterfactual simulations using the estimates. According to my analysis, feasible revenue-based reforms that ensure spending equity or adequacy have little impact on school quality or household demographics in Detroit. (JEL H75, I22)

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