Local School Finance and Productive Efficiency: Evidence from Ohio

This paper examines the relationship between local financing of education and school district efficiency. In a system of local school finance, the capitalization of school quality in housing prices provides homeowners with verifiable information regarding the impact of school officials’ actions and strong incentives to act upon that information. I find evidence that school districts with a higher percentage of revenues from local sources perform better on state math tests. In addition, the amount of residential property within a school district is positively related to math test passage rates.

Joshua HallEmail: