The Competitive Structure of Urban School Districts in the United States

§ Introduction and Overview The Tiebout (1956) model assumes that households choose their community of residence in part by the quality of its public schools. For the model to operate efficiently, school districts should be numerous. In 1916, there were over 200,000 public school districts in the United States. By 2005, there were fewer than 15,000. Most observers regard this decline as evidence of diminished relevance of the Tiebout model (Kenny and Schmidt 1994). However, almost all of the reduction in school districts came from the consolidation of tiny, one-room-school districts in rural areas. The consolidation of school districts in the urbanized parts of metropolitan areas was only a small part of the decline. There are, however, real differences in the market-structure of school districts among regions of the country. This study offers a new measure of this structure. Most studies of school district competitiveness focus on Metropolitan Statistical Areas (MSAs), which outside of New England include entire counties. The problem is that much of the land area of these counties is rural, so a count of MSA school districts includes many essentially rural districts whose enrollments are small but whose land area is large. We avoid this overcount by measuring school districts only within Urbanized Areas (UAs), whose geographic extent is determined by the density of population, not political boundaries. With this focus we can calculate the school district competitiveness of larger Urbanized Areas for the entire nation. Our primary measure of competitiveness is the fraction of UA land area that is occupied by the four largest districts. This gives us a measure of the district choices available to Tiebout-shoppers in the places where most people live. Our chief finding is that a majority of the American urban population can choose among at least four school districts. Tiebout choice is a realistic option for most Americans. However, there is extraordinary variation in the extent of this choice. The most competitive regions are large Urbanized Areas in the Northeast and North-Central United States. They offer scores of realistic choices for mobile families. Smaller UAs are somewhat less competitive in this respect, but the most dramatic variation is by region. The South and the arid West have much less Tiebout choice. Both can be accounted for by scale economies of the past. In the arid West, rural densities were low, which necessitated larger areas to achieve graded schools. In the South, …