School district responses to matching aid programs for capital facilities: A case study of New York's building aid program

Wen Wang, William D. Duncombe, John M. Yinger

Research output: Contribution to journalArticle

16 Scopus citations

Abstract

States are financing a larger share of capital investment by school districts but little is known about how districts respond to facility aid programs. Our paper addresses this gap in the literature by examining how a short-term increase in the matching rate for the Building Aid program in New York affected district capital investment decisions. We estimate a capital investment model and find that most districts are responsive to price incentives but that price responsiveness is related to the fiscal health and urban location of the district. Drawing on these results, we provide recommendations for the design of capital investment aid programs to increase their effectiveness in supporting high-need urban districts.

Original languageEnglish (US)
Pages (from-to)759-794
Number of pages36
JournalNational Tax Journal
Volume64
Issue number3
DOIs
StatePublished - Sep 2011

Keywords

  • Capital investment
  • Education finance
  • Matching grant

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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