A model explaining desired expenditure on education is estimated for a sample of New Jersey school districts. Because the limit on annual increases in school spending is binding for a subsample of jurisdictions, the Tobit estimation procedure is used. We test for equality of the pre- and postlimitation structures and find substantial similarity. The cap on expenditure increases was part of a court-ordered reform of New Jersey school finance law. The results can be used to explain the failure of the existing school finance laws in lessening expenditure disparities at the lower end of the distribution.

Original languageEnglish (US)
Pages (from-to)277-295
Number of pages19
JournalJournal of Urban Economics
Issue number3
StatePublished - May 1986

ASJC Scopus subject areas

  • Economics and Econometrics
  • Urban Studies


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