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Abstract
This study investigates how education inputs impact school performance. The focus is on local taxes since local tax revenues are the primary source of financing public schools. Using both OLS and 2SLS and examining 507 school districts in Pennsylvania during 1996 to 1999, results reveal that local taxes are strongly related to school performance implying that they have a direct effect on education inputs.
Acknowledgements
We want to thank discussants at the MEA conference in Chicago for very helpful discussion and advice about this paper.