Alternative Local Public Education Expenditure Functions: An Econometric Evaluation

Abstract

This article presents a formal econometric evaluation of competing median voter public education demand specifications. The Cox specification test is used to determine the appropriate role for intergovernmental aid and the appropriate tax share definition in the empirical models. Tests of the aid specification yield support for the popular notion that allowing for different voter income and aid elasticities is superior to treating aid as a supplement to voter income. Tests of the tax share definition indicate that the partial tax exporting tax share is superior to the complete and zero exporting tax shares examined. The results also indicate that the present theoretical models need to be extended to provide a greater role for the mix of nonresidential property in determining community fiscal behavior.

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