The Supply of Public School Quality

Education economists have estimated many education production functions but they have not estimated a supply curve of public school quality. In order to estimate the supply of public school quality, the price of a unit of public schooling must be found. Invoking the theory of implicit markets, the price of a unit of public school quality is derived from a series of housing market hedonic estimations, in which house price is regressed as a function of school quality. The implicit price is then inserted in an estimation of the supply of public schooling. The estimated price elasticity of supply is 0.14, suggesting that 1) demand-side policies do not effectively raise the quantity of public schooling supplied, and 2) school funding equalization attempts are not likely to significantly change the quantity of public school outcomes supplied in either rich or poor districts