UBLIC education is a sector of government where a usable measure of output quality, the achievement score in basic subjects, has existed in refined form for some time. Given the well-known problems in measuring public service outputs, it is surprising that test scores have not been more widely used by economists in educational research. A recent study of school districts in New York State provides information highly useful for relating educational performance to per-pupil expenditure and size of administrative unit, while at the same time making possible a reasonable attempt to isolate the important influences of pupil intelligence and socio-economic background. This paper represents the results of a careful analysis of the New York State study. The findings have been somewhat surprising. Size of school district is negatively related to performance, if at all, and expenditure is related strongly to performance only in larger school districts. Performance in small school districts, here defined as those in which there are fewer than 2,000 pupils in average daily attendance, was found to be highly unpredictable. More detailed findings are presented below after a brief discussion of the data and the simple model of the educational process used as a framework for analysis.

The paper by Walter Hettich and Stanley Winer (1988) on the economic and political structure of tax analysis is an important contribution, introducing a refreshingly positive approach into an analytical tradition where normative judgments have long been overly important. But Hettich and Winer pursue the logic of their approach only part of the way. In this comment, I would like to extend the Hettich-Winer (HW) positive approach to what I consider to be its logical conclusion, which should allow for a more complete analysis that avoids some possible methodological and ethical biases. The HW model features voter support of a government where support is based positively upon the services received from a pure public good and negatively by tax costs including deadweight loss. Tax costs are affected by the choice of tax base, and different tax bases may involve different behavior responses (to avoid taxes) by different voters. The government wishes to maximize expected support, written as