A. Abigail Payne

School Finance Reform, the Distribution of School Spending, and the Distribution of Sat Scores

In this paper we study the effects of school finance reforms on the distribution of school spending across richer and poorer districts, and the consequences of spending equalization for the distribution of SAT scores across children from different family backgrounds. We use school district data from the 1977 and 1992 Censuses of Governments to measure the correlation between state funding per pupil and median family income in each district. We find that states where the school finance system was declared unconstitutional in the 1980s increased the relative funding of low-income districts. Increases in state funds available to poorer districts led to comparable or only slightly smaller increases in the relative spending of these districts, implying significant equalization of expenditures per pupil across richer and poorer districts. Using micro samples of SAT scores from this same period, we study the effect of changes in spending inequality within states on the gaps in test scores for children from different family backgrounds. We develop a two-sample procedure to estimate the fraction of students from each background group who write the test, and use these fractions to adjust for selectivity biases in observed test score outcomes. We find some evidence that the equalization of spending across districts leads to a narrowing of test score outcomes across family background groups.

Do Government Grants to Private Charities Crowd Out Giving or Fund-raising?

Economists have long observed that crowding out of government grants to private charities is incomplete. The accepted belief is that givers treat the grants as imperfect substitutes for private giving. We theoretically and empirically investigate a second reason: the strategic response of a charity will be to reduce fund-raising efforts after receiving a grant. Employing panel data from arts and social service organizations, we find that government grants cause significant reductions in fund-raising. This adds a new dimension to the policy discussions - analysts should account for the behavioral responses of the charity, as well as the donors, to government grants.

Does Federal Research Funding Increase University Research Output

Abstract This paper estimates the effects of federal research funding on research outcomes at 68 research universities. We provide a new interpretation of the instrumental variable estimate of the coefficient in a regression of the output of an institution on an input. Absent parameter heterogeneity, it captures the total change in output when an institution obtains an additional unit of the input that may be correlated with the other inputs that affect the output measure. Our instrument for research funding is alumni representation on U.S. Congressional appropriations committees. Our results suggest an increase of

Measuring the Effect of Federal Research Funding on Private Donations at Research Universities: Is Federal Research Funding More than a Substitute for Private Donations?

1 million in federal research funding (1996

Federal Sentencing Guidelines and Mandatory Minimum Sentences: Do Defendants Bargain in the Shadow of the Judge?

) to a university results in 10 more articles and 0.2 more patents. The change in citations per article is negative but very small and imprecisely measured. As a first approximation, increasing federal research funding on the margin results in more, but not necessarily higher quality, research output.

Chapter 1 – Charitable Giving

The nature of federal research funding has changed in the United States over the last 30 years. In part, federal research funding has changed in the distribution of funding across disciplines and across universities. Federal funding to universities with historically low levels of funding has also experienced greater growth than those universities with historically high levels of funding. In addition, universities have become more involved in the political process with respect to the allocation of funding for higher education. As the nature of government funding changes, this paper questions its effect on private donations to research and non-research universities. The general presumption of much of the existing theoretical work is that government and private funding for charitable goods are substitutes. Limited evidence exists to suggest, in some circumstances, there may be a positive correlation between these two sources of funding. Potentially, because the government undertakes the expense to gather information about the research universities, and engages in such activities as peer-review of research proposals, the government through its grant awards may provide a signal of quality of research or other information to donors that is less noisy than that available to private donors. Similarly, there may be other types of spillover effects from research funding to private donations. In this case, a change in government grants has both a positive and negative effect on private donations, suggesting a positive correlation between private and public donations if the effect from the dissemination of information is greater than the substitution effect of government grants. I examine data for private and public universities in the United States to measure the relationship between private and public donations under a fixed-effects OLS regression. I explore issues of bias from endogeneity or omitted variables and report the results from a two stage least squares regression in which I use a set of measures that affect federal research funding but not private donations. Regardless of the specification, the results suggest private and public donations are positively correlated for research universities and negatively correlated for non-research institutions. On average, increasing federal research funding by one dollar increases private donations by 65 cents at research universities, decreases private donations by 9 cents at universities whose highest degree granted is a masters, and decreases private donations by 45 cents at liberal arts colleges.

Does Government Funding Change Behavior? An Empirical Analysis of Crowd Out

The 1987 sentencing reforms were expected to change profoundly the environment in which plea bargaining takes place by increasing the average length of sentences for serious crimes and by eliminating the variation in sentences imposed by different judges. Using cases initiated and resolved between 1981 and 1995 in two federal district courts of New York, we examine whether the variation in sentences attributable to individual judges has been eliminated, and we investigate whether the plea‐bargaining behavior of defendants has changed. Surprisingly, we find that the amount of variation attributable to the judge for trial sentences increases post‐reforms. Consistent with this result, defendants continue to bargain in the shadow of the judge post‐reforms, particularly for crimes involving minimum sentences. Further, sentences may not have increased as much as expected: although the average prison term for trial sentences increases post‐reforms, there is no systematic increase in the average length of the pleas.

The Role of Politically Motivated Subsidies on University Research Activities

This Chapter summarizes the overall facts about charitable giving. Charitable giving has remained an active and important area within Public Economics. Then also discusses about the four main approaches one could take to research on charitable giving. The first approach is to look at giving as a simple individual economic decision, where a quantity of gifts to supply is determined by maximizing a utility function subject to a budget constraint. The second approach is to think of giving as a strategic interaction, with many actors involved. The third and potentially very fruitful approach based on giving as a social exchange. The request may come from a friend, a co-worker, a door-to-door solicitor, a phone call from a fund drive, an on-air campaign from public broadcasting, a television commercial with an emotional appeal, or even from a news report during a time of a disaster. Finally, the fourth and newest approach: giving as a response to conscious, or perhaps even unconscious, empathic, moral, or cultural urges.

Do US Congressional earmarks increase research output at universities

When governments introduce programs or funding for initiatives that are partially provided by lower levels of governments or in the private or third sectors, should the government be concerned about whether its efforts are crowded out by changes in behavior by individuals and institutions participating in the provision of this good or service? The bulk of the theoretical literature suggests that crowd‐out is an issue. The (historic) bulk of the empirical literature, however, has failed to find a measurable crowd‐out effect. With better data and more sophisticated empirical techniques, there is a burgeoning literature that shows that crowd‐out exists. The purpose of this paper is to examine the recent literature that studies the issue of crowd‐out across a variety of venues to understand better the empirical estimation issues as well as the institutional details that can lead to a better understanding of the effects of government programs on individuals and organizations.

The Impact of Cost on the Choice of University: Evidence from Ontario

Since WWII, the federal government has played a significant role in funding basic and applied research at universities. During the initial growth of research funding, the issues surrounding which universities would be the recipients of federal funding were not addressed by the government. As such, by the late 1970s, a majority of research funding was concentrated in a few universities located within a few states. This article examines two politically motivated methods used since 1980 to affect the distribution of funding on research activities, namely, congressional earmarks and set-aside programs. The results suggest that there has been a modest change in the distribution of research funding across research and doctoral universities, especially since 1990. Funding from earmarked appropriations has increased the quantity of academic publications but decreased the quality of these publications as measured by citations per publication. At those universities that qualified for funding under the set-aside programs, however, the quality of publications has increased whereas the quantity of publications has decreased.