9408970 Schneider The delivery of services by local governments involves a complex series of steps going from the institutions that supply them to the citizens who use them. To improve the delivery of public services, many reformers now suggest eliminating some of these steps and having government imitate private markets, by increasing the number of suppliers and "empowering" citizens to shop around. This market model assumes consumers already know about the services they use or that they will search to find out about price and quality. While the costs of, and the incentives for, search in private markets are fairly well understood, the ability of "citizen/consumers" to gain information in the use of local public goods is not well known. This project will explore the process of information gathering in local public services, with a primary focus on education, perhaps the most important service provided by local governments. In recent years a few local school districts have established parental choice, breaking the tight relationship between household location and the schools that children must attend. Since these districts can be matched with others that have not introduced choice, we will examine if and how choice affects parental behavior and student performance. Specifically, using a research design matching districts with school choice to those without choice, this project will compare how citizen/consumers search for information and the quality of their information about schools. To test for a link between increased choice and citizen/consumer behavior, the project will survey residents in four communities with different public service delivery arrangements and different socioeconomic status. The project will: 1) examine the level and the accuracy of information citizens have about local public goods; 2) link these levels of information and the search processes to institutional structures that affect the incentives of individuals to gather and use information. In addition, the project will: 3)examine the networks of information in which local citizens operate and explore how these networks influence the quantity and the quality of information that citizens have; 2) examine the equity implications of search procedures, especially by comparing the networks in which individuals of different races and classes are embedded; and, examine the efficiency gains that better matching of student/consumer interest to school curricula can provide as shown by improvements in student test scores in math, science and reading. This project promises to substantially enhance our understanding of the topic.
