Tim R. Sass

Charter Schools and Student Achievement in Florida

I utilize longitudinal data covering all public school students in Florida to study the performance of charter schools and their competitive impact on traditional public schools. Controlling for student-level fixed effects, I find achievement initially is lower in charters. However, by their fifth year of operation new charter schools reach a par with the average traditional public school in math and produce higher reading achievement scores than their traditional public school counterparts. Among charters, those targeting at-risk and special education students demonstrate lower student achievement, while charter schools managed by for-profit entities peform no differently on average than charters run by nonprofits. Controlling for preexisting traditional public school quality, competition from charter schools is associated with modest increases in math scores and unchanged reading scores in nearby traditional public schools.

Classroom Peer Effects and Student Achievement

We analyze the impact of classroom peers’ ability (measured by their individual fixed effects) on student achievement for all Florida public school students in grades 3–10 over a 6-year period. We control for both student and teacher fixed effects, thereby alleviating biases due to endogenous assignment of both peers and teachers. Under linear-in-means specifications, estimated peer effects are small to nonexistent, but we find some sizable and significant peer effects within nonlinear models. We also find that classroom peers, as compared with the broader group of grade-level peers at the same school, exert a greater influence on individual achievement gains.

Measuring the Effects of Municipal Zoning Regulations: A Survey

Over the past 25 years a large literature has developed that attempts to measure the impact of zoning regulations on real estate markets. This vast zoning literature is also quite diverse; studies differ significantly in methodology, data and the results obtained. In this paper we systematically survey each of the four general types of zoning studies: externality studies, exogenous land-use zoning studies, studies of characteristics zoning and endogenous zoning studies. Our review is designed to achieve the following objectives: (1) to summarise existing studies and point out methodological problems; (2) to compare different studies to determine what may be causing the differences in results that are obtained; (3) to determine what conclusions can be drawn from the existing body of research; and (4) to suggest how the shortcomings of previous research can be avoided and thereby provide a guide for future research.

The theory and estimation of endogenous zoning

Abstract In this paper we develop and test a political theory of zoning. In our model, jurisdictions compete through their choice of tax-expenditure packages and zoning regulations. Voters choose among jurisdictions via the Tiebout mechanism. Thus local fiscal variables, zoning, and the demographic makeup of communities are all simultaneously determined. Our empirical estimates indicate that zoning decisions are consistent with externality, fiscal, and exclusionary motives. After controlling for selection bias we find that land-use regulations appear to ‘follow the market’ and do not appreciably affect housing values. In contrast, we show that characteristics-zoning regulations have significant effects on housing values.

Physician ownership of ancillary services: indirect demand inducement or quality assurance?

This paper analyzes two competing explanations for the ownership of ancillary facilities by referring physicians: indirect demand inducement and quality assurance. Consistent with the demand-inducement explanation we find physician-owned clinics treat patients for 50 percent more visits than do independent clinics and the differential is directly related to factors facilitating demand inducement. We find no difference in quality of care across ownership structures, however. In further support of the demand-inducement hypothesis we find that physical therapists are less likely to work in physician-owned clinics in states where therapists are allowed to practice independently.

The Allocation of Resources by Voting

A general theory of voting, which explains under what conditions voting will be chosen as a means for allocating resources and how the constitution that governs the voting will be structured is presented. It is hypothesized that developers of voting organizations will structure their organizations in order to maximize the value of shares sold by minimizing the expected costs of wealth transfer and decision making in the voting organization. Implications regarding the allocation of votes and assessments within the organization, the domain of voting decisions, and the optimal voting rule are tested with data on the constitutional structure of condominium homeowner associations.

The Choice of Municipal Government Structure and Public Expenditures

Summary and conclusionsNumerous empirical studies have attempted to measure the effect of varying government structures on public expenditures. I argue that these prior may have produced biased estimates, as they are predicated on the assumption that government structures are exogenous.To test the effect of endogenous government structures on public spending, I created an economic model of municipal government choice based on the constitutional choice model of Buchanan and Tullock. The model performed well in predicting the existing government forms of towns in Connecticut.The government choice model was then coupled with a standard median voter model of public expenditure to gauge the effect of chosen government forms on both school and non-educational municipal expenditures. When the choice of government structure is treated as endogenous, school expenditure levels are invariant to government structure. In contrast, per pupil school expenditures are estimated to be significantly lower in representative democracies when government structure is exogenous. In the case of non-educational expenditures, both the endogenous and exogenous government structure models indicate that municipal expenditures are not affected in a consistent way by government structure.The results are consistent with the opinion of Downs (1957) who argues that electoral competition is sufficient to constrain the behavior of elected officials. Indeed, the results suggest that voter preferences not only determine the level of municipal expenditures, but the structure of local governments as well.

Mandated Exclusive Territories and Economic Efficiency: An Empirical Analysis of the Malt-Beverage Industry

* We thank Bruce Benson, Robert B. Ekelund, Jr., Roger Folsom, Gary Fournier, Micha Gisser, Doug Greer, Barry Hirsch, John Morris, and an anonymous referee for their valuable comments. We are also grateful to Jerry Steinman and Frank Chaloupka for providing some of the data. Alex Hayes, John Keiffer, Mike Lund, Mark Nichols, and Mark Thornton provided able research assistance. The San Jose State University College of Social Sciences provided financial support to Saurman. Any remaining errors are solely our responsibility. Industries in which firms have imposed vertical territorial restraints include audio components, hearing aids, sailboats, soft drinks, and beer. See Thomas R. Overstreet, Resale Price Maintenance: Economic Theories and Empirical Evidence 84-101 (staff report, Federal Trade Commission, Bureau of Economics 1983). For discussions of the territorial restrictions in the hearing aid industry, see Howard P. Marvel, Vertical Restraints in the Hearing Aids Industry, in Impact Evaluations of Federal Trade Commission Vertical Restraints Cases (Ronald N. Lafferty, Robert H. Lande, and John B. Kirkwood eds. 1984). Robert Larner, The Economics of Territorial Restrictions in the Soft Drink Industry, 22 Antitrust Bull. 145 (1977); Barbara G. Katz, Territorial Exclusivity in the Soft Drink Industry, 27 J. Indus. Econ. 85 (1978); and Louis W. Stern, Eugene F. Zelek, and Thomas W. Dunfee, A Rule of Reason Analysis of Territorial Restrictions in the Soft Drink Industry, 27 Antitrust Bull. 481 (1982), analyze the use of exclusive territories in the soft-drink industry. None of these articles include empirical tests, however.

Motorcycle Helmet Laws and Motorcyclist Fatalities

We employ panel data over a 22-year period to study the impact of state laws mandating helmet use by motorcyclists. We find that helmet laws are associated with an average 29–33% decrease in per capita motorcyclist fatalities. However, since voluntary helmet wearing rates are higher in harsher climates, the efficacy of helmet laws varies directly with the warmth of a states climate. Repeal of helmet laws in the 1970s and subsequent re-adoption in the late 1980s and early 1990s have had roughly symmetrical effects on fatalities. Alcohol consumption and the number of police available to enforce traffic laws also significantly effect motorcyclist fatalities.

Agency Cost, Firm Size, and Exclusive Dealing

EXCLUSIVE dealing contracts constrain a seller to marketing the goods of only a single supplier. Traditionally, there have been two explanations for the existence of such contracts. One explanation is that they are a means by which manufacturers can assure that maximum selling effort is being devoted to their product alone. Alternatively, some have viewed such contracts as an attempt to erect barriers to entry. Recent articles by Marvel1 and Grossman and Hart2 have offered new and divergent theories of exclusive dealing arrangements, particularly with respect to the choice between direct writers (exclusive agents) and independent agents in the insurance industry. Marvel explains the coexistence of exclusive and independent agents by focusing on the enforcement of supplier property rights. Insurance companies, for example, can charge for ancillary non-brand-specific services such as advertising or training by paying an appropriately lower commission rate to agents. If the agent sells the policies of other companies, however-the commissions for which are higher-he can be a free rider by using the services provided to market the policies of other companies. Exclusive dealing contracts prevent such free riding from occurring. A necessary requirement for this explanation is that directly pricing the ancillary services is costly. Marvels theory implies that in situations where agent-level promotion is relatively more important than company-level promotion, exclusive dealing contracts are less likely to be used. Therefore, commissions for