The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

School Choice and Competition

  • Caroline Hoxby
Reference work entry


The two insights behind school choice are that externalities motivate government financing, but not provision, of schools, and that government-run schools will probably, owing to lack of competition, be x-inefficient. Under school choice, students choose among schools that compete for them on a truly level playing field. Governments play a financing, auditing, refereeing, and market-design role. Modern research focuses on evaluating the effects of school choice on the x-efficiency of schools, analysing how programme design affects the supply of schools, and investigating how information and matching mechanisms affect demand.


Charter schools Deferred-acceptance mechanism Educational externalities Friedman, M Magnet schools School choice School competition School vouchers Strategy- proof mechanisms Tiebout choice Top trading cycles Tuition tax credits Vouchers X-efficiency 

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Caroline Hoxby
    • 1
  1. 1.