Education in Central Cities
The production-function approach
provides important insights into why
the educational
achievement in central cities is
relatively low.
Education in Central Cities
1. Household sorting
• Households tend to sort with respect to the demand for local public goods
and the demand for housing. As a result, households are segregated with
respect to income and educational attainment.
2. Higher production cost
• It costs more to produce education in central cities, and so a given education
budget generates less in terms of student achievement.
The key input to the education
production process is teachers, and it
would be sensible to focus extra
resources on changing the quantity
and quality of teachers.