When there are peer effects in education, private schools have an incentive to vary tuition to attract relatively able students. Epple and Romano (1998) develop a general equilibrium model characterizing equilibrium pricing and student selection into schools when peer effects are present. The...

To study the effects of ability grouping on school competition, we develop a theoretical and computational model of tracking in public and private schools. We examine tracking's consequences for the allocation of students of differing abilities and income within and between public and private...