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Public school choice

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Title:
Public school choice parent's consumer behavior and utility maximization
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Sinisi, Chloe Randolph Venable
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English
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xvi, 284 leaves : illustrations, forms ; 29 cm

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School choice ( lcsh )
School choice -- Case studies -- Colorado -- Adams County ( lcsh )
School choice ( fast )
Colorado -- Adams County ( fast )
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Case studies. ( fast )
bibliography ( marcgt )
theses ( marcgt )
non-fiction ( marcgt )
Case studies ( fast )

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Includes bibliographical references.
General Note:
Submitted in partial fulfillment of the requirements for the degree, Doctor of Philosophy, School of Education and Human Development, Administration, Supervision, and Curriculum Development.
Statement of Responsibility:
by Chloe Randolph Venable Sinisi.

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|University of Colorado Denver
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|Auraria Library
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All applicable rights reserved by the source institution and holding location.
Resource Identifier:
26706667 ( OCLC )
ocm26706667
Classification:
LD1190.E3 1992d .S56 ( lcc )

Full Text
PUBLIC SCHOOL CHOICE: PARENTS' CONSUMER BEHAVIOR AND
UTILITY MAXIMIZATION
by
Chloe Randolph Venable Sinisi
B.A., The College of William and Mary, 1965
M.S., City University of New York, 1971
A thesis submitted to the
Faculty of the Graduate School of the
University of Colorado in partial fulfillment
of the requirements for the degree of
Doctor of Philosophy
Administration, Supervision, and Curriculum Development
1992
; J-A
> I
r


1992 by Randy Venable Sinisi
All rights reserved.


This thesis for the Doctor of Philosophy
degree by
Chloe Randolph Venable Sinisi
has been approved for the
School of
Education
by
Laura D. Goodwin
Date r
Steven G. Medema


Abstract
Sinisi, Chloe Randolph Venable (Ph.D., Administration, Supervision and
Curriculum Development)
Public School Choice: Parents' Consumer Behavior and Utility
Maximization
Thesis directed by Professor Michael J. Murphy
School choice policy is a popular market-oriented reform strategy,
yet little is known of parents' behavior when choosing schools. Guided
by welfare economic theory, the consumer behavior and utility
maximization of 756 parents of different socioeconomic levels were
explored. These parents had the opportunity to choose among public
schools in a large suburban district.
This study found that families' socioeconomic status was not as
significant in school choice as had been supposed in previous studies.
A greater percentage of lower SES parents chose alternate schools.
However, parents' school information sources differed by their SES.
Multivariate analyses of variance and multiple comparisons were
used to analyze survey data on parents' preferences and utility functions
relating to school quality, convenience of location, and maintaining family
culture. Also examined were school district policies that influenced
consumer behavior, parents' school choice through residential selection,
and parents' information sources.


After two years of district school choice, almost half of the parents
explored school alternatives before making their final choice. A quarter
of the parents ultimately chose their neighborhood school and nearly a
quarter chose an alternate school.
Parents were divided into four consumer groups by their
awareness, search and selection behaviors: (a) parents (10%) unaware
of the choice option who kept their children in neighborhood schools; (b)
aware parents (41%) who did not search and kept their child in
neighborhood schools; (c) aware parents (25%) who searched
alternatives and purposely chose their heighborhood school; and
(d) aware parents (23%) who investigated alternatives and transferred
their child to an alternate school. Each group contained approximately
the same ethnic and SES percentage.
Parents who kept their children in neighborhood schools placed
a higher value on convenience of location and maintaining their family's
lifestyles and values than on school quality. Those parents who chose
alternate schools sought schools that met the child's needs, had safe and
disciplined environments, and had higher student achievement. School
quality was highly valued by this group.
Parents in all groups and SES levels needed more information
about schools. District policies related to access, transportation, variety
of programs, and information were importance.
The form and content of this abstract are approved. I recommend its
publication.
Signed
v


Dedicated to:
Joseph Sebastian Sinisi, my husband
Joseph Vance Sinisi, my son
Melissa Venable Poynter, my sister


Acknowledgements
The encouragement, support, and guidance of others enabled me
to complete this thesis and earn my degree. I wish to acknowledge:
My advisor, Dr. Michael J. Murphy, who throughout my doctoral
program stood beside me and guided me. From him I learned the most
about research, theory, and policy. Without his high standards for me
and our division, his insights and knowledge, and his helpful critiques,
this would be a lesser thesis. However, improving the quality of this work
is but one of the ways he has contributed to my development as a
scholar, researcher, and sometimes activist.
My committee members, Drs. Nancy Sanders, Laura Goodwin,
Kent McGuire, and Steven Medema, who each contributed different
perspectives and expertise. Nancy gave me encouragement. She was a
tenacious, intelligent, and caring role model. From her I learned to reach
in and enjoy the theoretic world. I have admired her political acumen.
Laura unlocked the door to statistics for me. Her teachings, clear
explanations, and high expectations made me love the research design
and analysis process. Her methodological advice made this a stronger
work. Kent's articulate and thoughtful policy analyses helped me learn to
dissect complex problems. Steve, whose speciality is economic theory,
gave this novice substantive advice through helpful critiques.
My professors, whom I wish to acknowledge for their help,
particularly Dick Koeppe, Mike Martin, the late Lance Wright, Marie


Wirsing, Jo Roberts, Jim Walpole, John Augenblich, and the division
secretary, Kearin O'Hara. Each one added something that made me a
better student and this a better thesis. I gratefully acknowledge the
contributions made by the late Russell Meyers to my intellectual and
moral development. He challenged me to stand up for my values.
My fellow students, especially those in my study group, who
enriched my studies. Over the last two years, Judy Campbell, Nola Gill,
and Leslie Sharp shared many days, tears, joys, anxiety, and laughter.
Our friendship and collaboration will never be forgotten.
My research benefactors, the administrators, staff, and parents in
the Adams 12 School District, who supported my research. To me they
will always be rated five stars. Particularly, I am indebted to Dr. Richard
Heaton who shared with me his research and computer skills. I shall
always remember the hours we spent processing and analyzing data
and talking about common interests. Without his support, this research
would not have been possible.
My family, who have always encouraged me to be the best I can
be. I appreciate my husband, Joe, for his constant loving support even
though my doctoral work has frequently intruded into our personal and
professional lives. Joe's broad range of knowledge and editorial advice
contributed to this dissertation. I also thank my son for prodding me to
achieve my dream and always having faith in me. As I pushed him to do
his best, he pushed me. No mother could have a better son. And finally I
wish to acknowledge my parents and grandparents who gave me both
the desire to learn and the means to support that pursuit.
viii


CONTENTS
CHAPTER
1. INTRODUCTION TO THE SCHOOL CHOICE PROBLEM.................1
Purpose of the Study................................... 7
Statement of the Problem................................8
Background of School Choice.............................9
Conceptual Framework...................................16
School Choice Reform in Colorado.......................22
Research Methodology...................................23
Structure of the Study.................................25
2. REVIEW OF THE LITERATURE.................................27
Introduction...........................................27
Overview of School Choice Opportunities................28
The School Choice Debate...............................30
Education: A Public or Private Good..............33
The Public Interest in Education.................35
The Conceptual Framework.............................. 38
Welfare Economic Theory..........................38
Public Choice Theory............................ 45
The Tiebout Model................................49
The Theory of Rational Choice....................52
Utility..........................................53


Consumer Choice Theory and Research.......................57
Consumer Choice: Decision Process..................59
Individual Factors............................61
Situational Factors...........................62
Consumer Choice: Information Acquisition
and Utilization....................................63
School Choice Research: Parents as Consumers..............65
School Choice: Decision Process....................66
School Choice: Information Acquisition and
Utilization........................................73
Sources of Information........................76
Information Selectivity and Receptivity.......77
Utility Maximization in School Choice.....................80
The Utility of School Quality......................80
The Utility of Maintaining Family Culture..........86
The Utility of Location Convenience................89
School Choice through Residential Choice......93
Other Utility Functions............................95
Conclusions............................................. .96
3. RESEARCH DESIGN............................................100
Studying Parents as Consumers............................100
Data Source..............................................104
Setting.......................................... 105
Sample............................................109


Data Collection.......................................110
Survey Instrument Design........................112
Checking for Response Bias......................115
Data Processing and Analysis..........................116
Analyses of Variance............................118
Multiple Comparison Procedures..................118
Limitations of the Study..............................118
Summary...............................................121
4. RESULTS AND DISCUSSION OF FINDINGS.................122
Descriptive Data......................................123
Description of Parent Respondents to the Survey.125
School Choice Behavior: Parents as Consumers..........127
Estimate of Response Bias.......................132
Data Analyses.........................................143
Test for Homogeneity of Variance................145
Explaining School Choice Behavior...............145
Utility Dependent Variables.....................146
Analyses of Variance.........................147
Multiple Comparisons.........................151
Ordinal Summaries of Mean Scores.............153
District School Choice Policy Dependent Variables... 157
Analyses of Variance.........................158
Multiple Comparisons.........................162
Ordinal Summaries of Mean Scores.............164
xi


Information Source Dependent Variables...........166
Analyses of Variance..........................169
Multiple Comparisons..........................174
Ordinal Summaries of Mean Scores..............176
Other Results....................................179
Summary of Major Findings..............................182
Discussion of the Findings.............................185
Multidimensional Consumer Approach to
School Choice Behavior...........................186
Research Findings on Consumer Behavior...........188
Research Findings on Utility Maximization........191
The Utility of Location Convenience...........191
The Utility of School Quality.................193
The Utility of Maintaining Family Culture.....194
Socioeconomic Status and Utility Maximization... 195
District School Choice Policies and the Market
Environment......................................196
Information Acquisition..........................199
List of Major Findings.................................201
5. SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS................204
School Choice as a Market-Oriented Reform Strategy....204
Consumer Behavior in Public School Choice..............207
Improving School Quality.........................210
Ensuring Educational Opportunity.................212
Increasing Diversity and Expanding Variety.......214
Promoting Autonomy...............................215
xii


Empowering Parents...........................216
The Effect of Public School Choice on the
Social Welfare............................T..217
Implications,......................................219
Consumers and Markets........................219
Barriers to Competition....................220
Different Capacities to Be Informed........222
Negative Externalities Associated with the
Existence of Public Goods..................222
Recommendations....................................224
Making the Market Mechanism Improve Schools..225
Creating Demand............................225
Increasing and Improving Supply............228
Regulating.................................229
Coupling with Other Reform Methods......229
Future Research Directions.........................232
APPENDICES
A. PILOT TEST OF SURVEY INSTRUMENT....................237
B. SURVEY INSTRUMENT..................................224
C. CONSUMER GROUP PROFILES............................250
REFERENCES..................................................262
xiii


FIGURES
Figures
4.1. School Choice Consumer Groups: Tracking Consumer
Behavior..............................................131
4.2. Socioeconomic Status Level and Consumer Group
Histogram about Respondents...........................136
4.3. Ethnicity and Consumer Group Histogram about
Respondents...........................................137
4.4. School Level and Consumer Group Histogram about
Respondents...........................................138
4.5. GRP by SES Interaction for Information Source Dependent
Variables.............................................175
xiv


TABLES
Tables
4.1. Demographic Information about All Respondents........124
4.2. Consumer Behavior Information about All Respondents..128
4.3. Consumer Behavior Segmented in Four Groups...........130
4.4. School Demographic Information about Respondents.....133
4.5. Head of Household Demographic Information about
Respondents..........................................134
4.6. Significant Relationships between Early and Later
Respondents on Demographic and Utility Variables.....140
4.7. Significant Relationships between Early and Later
Respondents on Information Source Variables..........141
4.8. Comparisons between Non-respondents and
Respondents..........................................144
4.9. Multivariate and Univariate F Ratios for Ten Utility
Dependent Variables..................................148
4.10. Marginal Means and Standard Deviations for Four
Consumer Groups and Ten Utility Dependent Variables..150
4.11. Multiple Comparisons of Group Mean Differences
on Ten Utility Dependent Variables...................152
4.12. Ordinal Summary of Consumer Group Mean Scores
for Ten Utility Dependent Variables..................155
4.13. Multivariate and Univariate F Ratios for Five District
Policy Dependent Variables...........................159
4.14. Marginal Means and Standard Deviations for Four
Consumer Groups and Five District Policy Dependent
Variables............................................160
xv


4.15. Marginal Means and Standard Deviations for Three
Socioeconomic Status Levels and Five District Policy
Dependent Variables..................................161
4.16. Multiple Comparisons of Group Mean Differences
on Five District Policy Dependent Variables..........163
4.17. Multiple Comparisons of Socioeconomic Status Level
Mean Differences on Five District Policy Dependent
Variables............................................165
4.18. Ordinal Summary of Consumer Group Mean Scores
for District Policy Dependent Variables..............167
4.19. Ordinal Summary of Socioeconomic Status Level Mean
Scores for District Policy Dependent Variables.......168
4.20 Multivariate and Univariate F Ratios for Nine Information
Source Dependent Variables...........................170
4.21. Marginal Means and Standard Deviations for Four
Consumer Groups and Nine Information Source
Dependent Variables..................................172
4.22. Marginal Means and Standard Deviations for Three
Socioeconomic Status Levels and Nine Information
Source Dependent Variables...........................173
4.23. Multiple Comparisons of Group Mean Differences
on Nine Information Source Dependent Variables.......177
4.24. Multiple Comparisons of Socioeconomic Status Level
Mean Differences on Nine Information Source
Dependent Variables..................................178
4.25. Ordinal Summary of Consumer Group Mean Scores
for Nine Information Source Dependent Variables......180
4.26. Ordinal Summary of Socioeconomic Status Level Mean
Scores for Nine Information Source Dependent Variables... 181
xvi


CHAPTER 1
INTRODUCTION TO THE SCHOOL CHOICE PROBLEM
During the last quarter of the twentieth century, diverse economic,
ideological, and political factors have fueled growing criticism of public
education in America. An emerging global economy pressures the
American education system to produce a work force that is skilled and
adaptable for a changing world. This view is in keeping with Nobel
laureate economist Robert Solow's claim that economic growth demands
an educated populace (Buchholz, 1990). America, along with other
nations, is responding to pressure for school improvement by enacting
widespread educational reforms (Adler, Petch, & Tweedie, 1989; Glenn,
1989; Guthrie & Koppich, 1990).
In the quest for improved education, school choice has become a
popular school reform strategy (Goertz, 1990). School choice enables
parents to select schools for their children from a range of educational
alternatives (Association for Supervision and Curriculum Development,
1990). The concept introduces market control, consumer choice,
competition, and educational diversity into American public education as
methods to improve school quality.
Developing and offering choice among schools brings together
four ideas: (a) "expansion of educational opportunity for educators,
families and students; (b) use of controlled competition to help stimulate


improvement among schools and districts; (c) recognition that there is no
one best kind of school for all students and teachers" (Nathan, 1989b,
p.5); and (d) inclusion of parental influence in decisions concerning their
children's education (Rosenburg, 1989).
The principles of choice and educational diversity are currently
becoming accepted within the public policy arena. This has led to school
choice policy formulation on state, local, and national levels (Raywid,
1984, 1989). At all these levels, policy makers from both political parties
and varying ideological perspectives advocate parental choice and
competition among schools as a device to improve education (Maddaus,
1990).
In America, education has long been considered a public good
provided by government for the benefit of society as a whole (Alexander
& Alexander, 1985; Devins, 1989; Levin, 1989). In school choice, the
educational public good is distributed by means of a market model.
Underlying the school choice movement is an assumption that the
societal goals of education can be achieved within a market system with
minimal governmental control (Martin & Burke, 1990).
In this new educational marketplace, parents make individual
consumer choices when they select schools. It is questionable that these
individual choices, while critical to the market system, will create
improved schools that are compatible with the social welfare goal of
education. As a result, the way parents choose schools and the
consequences of their consumer behavior on both the institution of
education and the general welfare is of increasing concern to policy
makers, educators, and citizens.
2


The concepts of public good and social welfare are built upon
three basic societal values: liberty, efficiency, and equity (Garms,
Guthrie, & Pierce, 1978). These values are used to study social policy.
To explore school choice, this study has added excellence to these
values, because the pursuit of excellence has dominated the school
reform movement of the 1980s. Liberty, excellence, efficiency, and equity
each play a part in school choice because each of these values defines
the realm of both policy makers and of schools as public institutions
(Guthrie & Koppich, 1990). Therefore, this study uses these values and
the notion that they compete with each other in the policy arena to
analyze school choice. Guthrie, Garms, and Pierce (1988) and Boyd and
Cibulka (1989) have also applied the competing values model to
educational policy.
On the surface, school choice appears to be an issue about liberty
and the right to choose. However, school choice is not exclusively about
parents' right to choose among schools. It also relates to the education
of all children and the effect that the liberty to choose schools has on
overall excellence, efficiency, and equity in education. School choice
advocates insist that by increasing individual liberty and following the
market model, market forces will improve school quality, increase
efficiency, and expand educational opportunity for all students.
The liberty to choose is an integral part of both a democratic
society and a free market economy. Merging the democratic and market
perceptions of liberty makes school choice one of the more controversial
reform strategies debated today because the individual's private right to
3


choose has the potential to clash with the public interest in an educated
citizenry (Mitchell & Goertz, 1990).
Advocates of school choice argue that liberty, excellence,
efficiency, and equity are addressed when parents are empowered to act
as consumers in an educational market. School choice provides the
freedom to choose (liberty); spurs competition which promotes
accountability and improves school quality (excellence); increases
diversity in educational services and expands educational opportunities
to the disadvantaged (equity) while accomplishing all in a cost effective
manner (efficiency) (Chubb & Moe, 1990; Finn, 1986; Nathan, 1989a;
Raywid, 1984).
On the other hand, critics contend that parents choosing schools
causes further deterioration of ineffective schools, places education
outside governmental control, increases costs, creates inequitable
systems, promotes elitism, and segregates schools by race, ethnicity, and
income. They argue that, while school choice contributes to inequality
and inefficiency, it has not been demonstrated that choice improves
schools (Elmore, 1991; Raywid, 1984).
The dichotomous views held by advocates and critics of choice are
the result of their differing value perspectives on liberty, excellence,
efficiency, and equity. The opposing views stem from a matter of
interpretation and ascribed importance. First, individuals interpret these
social values in different ways. For example, public interest in
educational equity may be provided by a policy that gives all students the
opportunity to enroll in any district school. All the parents who can afford
the added expense of having their children in a chosen school may think
4


that arrangement is "equal" or "fair." However, low income families,
without the resources to provide transportation to a "chosen" school, may
interpret this policy as inequitable in terms of their private interest.
Secondly, individuals ascribe different levels of importance to these
values. When one value is ranked higher than another, it redistributes
the balance and creates conflict. When considering how private or public
interest can best be served, competing values create tensions and
debate. For example, giving parents the liberty to choose schools may
encourage flight from ineffective schools by higher income families,
leaving the children of lower income families in impoverished schools
without an equal opportunity for quality education. In this case,
emphasizing "liberty" conflicts with "excellence" and "equity."
The provision for both private and public interests in school choice
raises the following questions: Can society best satisfy the public interest
in education with a market system? Conversely, will the sum of all
individual school choices result in collective errors that negatively affect
the social welfare? In the case of collective errors, will government have
to maintain a monopoly or restrict consumer choice? Finally, will society
maintain the status quo and tolerate collective errors to allow a
rearrangement of liberty, excellence, efficiency, and equity values?
There are many cases where collective errors resulting from
individual consumer choices jeopardize public health, safety, and
welfare. In response, a government may either intervene as a monopoly
and provide centralized services which the market cannot provide,
regulate the consumer and the market forces, or ignore the problem
entirely. Governmental reactions to collective errors are exemplified in
5


the Volsted Act imposing Prohibition in 1920, its repeal in 1934, and
resulting regulations on alcoholic beverages. Other examples are
environmental laws to protect the public from pollution. An individual's
right to discharge waste into rivers is controlled for the public interest of
the environment. Extending this concept to school choice, parents acting
as individual consumers in a market model may create collective errors
that affect the general welfare through a rearrangement in social values.
Most current school choice proposals for an educational market
system are not advocating a totally free and unregulated market. School
choice is often presented as a hybrid market, paired with increased
autonomy. Most policy proposals usually preserve the government's
primary role in education that provides either services, funding, or
regulation. These proposals increase liberty without dissolving the
governmental monopoly. They suggest that school choice decentralize
the governmental role, improve school quality, empower parents, provide
educational opportunities and expand the diversity of educational
services.
Since public school systems are not free and unregulated
markets, few school choice models exist. As a result, research is more
readily conducted on the consumers in the market than on the market
itself. Both advocates and critics in the school choice debate lack
empirical evidence regarding parental consumer behavior to support
their arguments (Burke, 1991; Maddaus, 1990). Both sides rely on the
values and assumptions that underlie their respective theoretical views of
consumers, markets, and governmental monopolies. They extrapolate
from data that are sometimes peripheral or antiquated and make
6


assumptions concerning parental behavior in school choice situations
(Nathan, 1989c, Chubb & Moe, 1990). Lacking empirical data, most of
what has been written on the problem is therefore rhetorical (Raywid,
1984).
Purpose of the Study
The purpose of this study was to gather empirical data on school
choice behavior from parents who have the opportunity to choose any
public school, including their neighborhood school. This data was used
to evaluate whether the school choice market model of educational
reform will lead to either the improvement or deterioration of the social
welfare's interest in education. This study fills a gap in the existing
research by providing empirical data on public school choices parents
made for their children.
Most of the research on school choice has concentrated on why
choice options should exist and the effects of choice on individual
schools (Nathan, 1989d; Raywid, 1985). Few studies have been
conducted on the nature of the choices made by parents and students,
especially in terms of exploring what utility parents maximize when they
choose schools for their children and the factors that influence those
choices.
In addition, this study continues the line of research begun by
Burke (1991) on the utility parents maximize when they choose schools.
She studied students who made cross-district school transfers in
7


Colorado. Burke's research rested on the popular assumption among
school choice advocates that parents maximize school quality when they
choose schools. Using secondary data, Burke found evidence that may
support the school quality assumption because the parents in question
transferred their children to schools with higher student achievement and
higher social economic status.
This study builds upon Burke's research. That research was not
able to discover the utility parents maximize through school choice. It is
important to know upon what utility parents base their consumer choices
since the school choice market is created by consumers maximizing
utilities. Her findings raise consumer choice and public choice questions
concerning the impact of choice behavior on the institution of education
and the social welfare.
Statement of the Problem
Since choice behavior is the foundation of school choice reform
strategies, a lack of information on the consumer choice behavior of
parents who have chosen schools presents a serious impediment to
answering arguments either for or against school choice. Policy makers,
educators, and citizens do not know the parents' response to increased
opportunities for choice in schools and the effect parental consumer
choices will have on education and the social welfare. Without
information on revealed school choice behavior, the consequences of
implementing particular choice reform policies cannot be predicted.
8


In the case of school choice, individual parental choices and the
collective results of parents making school choices may differ in key
aspects from that which is often suggested by both advocates and critics
(Adler et al., 1989). Reasons which explain parental consumer behavior
and its consequences may be at variance with the predominating
assumptions underlying market theory, consumer choice theory, and
public choice theory.
The problem addressed in this study is the unknown utility
maximized by parents making school choice decisions. The three
research questions are:
1. When selecting a school of choice, what utility do parents
maximize?
2. When exercising school choice, is it likely that the collective
results of parents' individual consumers choices will work to the
advantage or the disadvantage of the social welfare?
3. What are the implications for policy makers and school
administrators regarding the impact of parental school choice behavior
on education and on the social welfare?
Background of School Choice Reforms
A favorable political climate for school choice policies now exists
in the United States. As an educational reform strategy, choice is backed
by a wide coalition that includes Presidents Reagan and Bush; former
U.S. Department of Education Secretaries Bennett and Cavazos and
current Education Secretary Alexander; the National Association of
9


Governors, noted economists Friedman and West, influential business
leaders, school critics, interest groups, and the respondents to recent
consecutive Gallup Polls on public attitudes regarding public education
(Boyd & Kerchner, 1987; Gallup, 1986; Gallup & Clark, 1987; Gallup &
Elam, 1988; Elam & Gallup, 1989, 1990).
The focus of school choice as a reform strategy continues to
vacillate between the broader approach of using public funds for
unregulated private education and the more controlled method of choice
options within the public system. (Bush, 1989; Olson, 1991; Raywid,
1985, 1991). Following an emphasis on privatization of education using
vouchers and tax credits in the early 1980s, the focus shifted to choices
within public schools. After the 1990 national elections, the focus
adjusted to include both the public and private sector, with renewed
emphasis on the latter (Pitsch, 1991; Pipho, 1989; West, 1981, 1985).
The United States remains the only democratic developed country that
does not allow either the choice of, or public funding of, private or
parochial education (Finn, 1986; Glenn, 1989a).
At the federal level, there is renewed interest in choice as a
primary reform strategy. In early December 1990, Bush and Cavazos
announced the creation of a national educational center for school
choice. Although Secretary Cavazos resigned shortly after that action,
President Bush replaced him with former Tennessee governor and
education reformer Lamar Alexander, who had previously advocated
school choice to the National Governors Association (Broder, 1991).
Calling himself "the education president," Bush also stepped up his
appeal to extend parental choice to the private sector and added 200
10


million dollars for school choice incentives to school districts in the 1992
federal budget (Pitsch, 1991).
At the state level, over 25 states either have school choice options
or are considering legislation to increase the use of choice in grades
K-12 (Pipho, 1989). By early 1991, six states had followed Minnesota's
lead in allowing but not mandating state-wide open enrollment between
school districts (Olson, 1990). Examples of states and localities that have
tried school choice options include a landmark federal experiment in
school choice conducted and studied in Alum Rock, California, during the
Reagan presidential era and several controlled enrollment options of
choice within districts used to desegregate schools in Cambridge,
Harlem, Seattle and San Jose (Wells, 1990).
School choice has been an active issue in public policy in many
states. Colorado became the first state to mandate open enrollment
within school districts (Roberts, 1990). In Milwaukee, an experimental
voucher program allowed a limited number of children from low income
families to attend nonsectarian private schools at state expense. The
Wisconsin Supreme Court recently upheld this first voucher-style plan
(Walsh, 1992). Oregon voters defeated a tax credit proposal on the
November 1990 ballot. Detroit considered incorporating private schools
into their public system (Schmidt, 1991). Most larger school districts
around the country already offer school choice in the form of magnet
schools, alternative schools, or programs for at-risk students. Other
choice options include home schooling, private schools, parochial
schools, charter schools, and post-secondary enrollment (Martin & Burke,
1990).
11


Excluding the choices of home, private and parochial schools,
all other types of school choice represent a fundamental change in
American public education's national norms and precedents. To provide
for the general welfare, a common school experience evolved over the
last two centuries to educate future citizens (Cremin, 1988; Glenn, 1989a;
Tyack, 1974). States, which had been granted plenary power over
education under the Tenth Amendment, continued to delegate most of
their education responsibility to local school districts, which assigned
students to public schools according to their residence. Therefore,
parents were not involved in public school selection decisions.
Historically, compulsory attendance laws have required parents to
send their children to the neighborhood public school or choose a private
or parochial school at their own expense (Pierce v. Society of Sisters.
286 U.S. 510, 1925). Since the 1960s, the concepts of neighborhood
schools and local authority have been altered by court orders to
desegregate public schools. After the Brown Supreme Court decisions
at mid-century, school districts in some segregated areas assigned
students according to voluntary or court-ordered racial balance plans
(Brown v. Board of Education. 349 U.S. 294, 1955; Keves v. School
District No, 1. 413 U.S. 189, 1973; Tyack, 1974).
In addition to compulsory education and school assignment by
residence, there has been a strong educational tradition and legal
precedent separating church and state in the United States. While
parents have the right to choose either public, private, or religious
education, public funding was limited to public education or tightly
controlled when used outside the public school system. Use of public
12


funds outside the public sector has been contested through the court
system. After decades of court decisions protecting the rigid separation
of church and state in education, the five to four Mueller v. Allen (463
U.S. 388, 103, 1983). Supreme Court decision "cracked the wall of
separation." This ruling supported the concept of school choice and
provided a way for parents to fund private or parochial education. When
Mueller v. Allen withstood legal scrutiny, Minnesota was allowed to
continue permitting a limited tax credit for educational expenses used in
any public, private or parochial school (Alexander & Alexander, 1985;
Burke, 1991; Zirkel & Richardson, 1988). Currently, all Minnesota
parents may apply for a tax deduction of up to $700 of educational
expenses incurred in either private, parochial, or public schools (Darling-
Hammond & Kirby, 1985; Maddaus, 1987/1988; Mann, 1983). Iowa
adopted a similar practice in 1987 (Goldberg, 1987).
Although parents' ability to choose schools has been historically
limited by tradition and law, school choice is not a new concept (Nathan,
1989b). Parents with financial resources have long practiced school
choice by either selecting their place of residence in the area of their
chosen school or by paying tuition to private or parochial schools.
Higher income families have always enjoyed educational diversity and
had the right to choose schools without governmental intervention
(Coons & Sugarman, 1978; Maddaus, 1987/1988).
Concurrently, notions of educational diversity and the individual's
right to choose date from the times of Thomas Paine and Adam Smith in
the 18th century (Paine, 1989; Smith, 1976). Both men advocated the
virtues of minimal governmental intervention. John Stuart Mill was an
13


ardent supporter of public education and an early proponent of school
choice. He questioned a democratic nation's imposition of a common
educational experience for everyone while extolling the virtues of
individualism and the importance of educational diversity (Buchholz,
1990; Mill, 1931). In modern times, the concept of school choice was
revived by economist Milton Friedman. He proposed using vouchers to
purchase educational services with government intervention kept at an
absolute minimum (Friedman, 1956, 1962; Maddaus, 1987/1988, 1990;
West, 1986).
When considering the role of government in education and the
balance between private interest and public interest and the right to
choose, the concept of school choice raises a number of value-laden
questions concerning liberty, excellence, efficiency, and equity. A vast
majority of citizens believe these values should be maximized and that
they underlie the formulation and implementation of public policy in
America (Maddaus, 1987/1988). "These values are considered 'good,'
'just,' and 'right.' This belief permeates the ideologies promoted by
political parties, religions, schools, and other social institutions" (Garms
et al., 1978, p. 8).
A shift in the balance of these values has taken place alongside
the educational reforms of the 1980s. The current reform movement
redirects attention from the equity issues that dominated educational
policy in the 1960s and 1970s and again focuses on excellence (as in
the Sputnik era) and adds an emphasis on the liberty to exercise
individual rights (Guthrie & Koppich, 1990). During the reforms of the last
decade, efficiency and excellence were emphasized over liberty and
14


equity (Adler et al., 1989; Glenn, 1989b). With the current change comes
another ideological shift from public interests and governmentally
provided public goods to private interests and private goods (Adler et al.,
1989).
The move to school choice as a reform strategy follows this
pattern. The shift in values reflects an over-all national and international
trend eschewing governmental control and public interest in favor of free
enterprise and private interests (Buchholz, 1990). "It seems that no
matter where you look governments have been trying market
mechanisms Adam Smith's ingenious invisible hand .. ." (Greenhouse,
1987, p.1). Concurrently, decentralization, deregulation and market
economics have become rallying cries of a political majority in America
and throughout the world (Buchholz, 1990; Finn, 1986; Glenn, 1989a;
Louis & Van Velzen, 1991).
The most radical school choice proposal to date has been
suggested by John Chubb and Terry Moe in their book, Politics. Markets
and America's Schools (1990). As Bush Administration advisors from the
Brookings Institution and Stanford University, these authors call for total
choice in schools by eliminating the "malignant bureaucratic institutions
of public schools" (Chubb & Moe, 1990). As such, they call for radical
ideological and organizational changes. Their proposal is more closely
aligned to the free market model rather than the hybrid concept of
combining market and governmental control as called for in other school
choice options.
Abolishing or even tempering the monopolistic hold of government
on public education in favor of a market system raises political questions
15


(Everhart, 1982). These questions concern the role of government in the
following areas: (a) regulating education, (b) insuring the quality of
education, (c) providing equal opportunity to education, and
(d) allocating public funds for education. In this arena, the values of
excellence, efficiency, and equity conflict with the liberty to choose.
Conceptual Framework
The call for school reform results from a concern that the nation is
not maintaining its international economic position and does not educate
its workers to be part of a strong global economy. Advocates of school
choice present an economic market model as the vehicle for school
improvement. It is therefore natural to turn to the field of economics for
the conceptual framework of this study. Economics is a science that
studies human behavior and situations that are involved in the use of
scarce resources to produce and distribute goods and services for the
satisfaction of human wants (Auld, Bannoch, Baxter, & Rees, 1983).
This study could have been conducted using other conceptual
frameworks from political science, psychology, or social psychology.
However, the economic perspective was selected because most school
choice reform strategies are built on a marketplace notion of schools with
parents and students as the consumers of the educational product
exchanged in the market. Accordingly, consumer choice theory, welfare
economics, and public choice theory are used to guide this study.
Consumer choice theory studies the behavior of individuals
making decisions concerning goods in the marketplace. These goods
16


are desired by consumers not for their own sake, but for the sake of some
satisfaction derived from their consumption. This theory assumes that all
consumers use rational decision-making processes and have knowledge
of all alternatives (Boulding, 1966). Consumer choice theory assumes
consumers attempt to gain satisfaction through their choices. With this
satisfying or maximizing behavior, a person selects the one alternative
which seems best or preferable to all others from a set of possible
alternatives. That choice satisfies a particular want. In making a choice,
consumers maximize an ultimate psychological product which
economists term "utility" (Boulding, 1966).
Consumers actually determine what items will be produced, how
they will be distributed, and what price will be paid. Through consumers'
utility maximization in a market economy, both the consumers and
producers benefit from efficient production. This is the essence of any
free market transaction (Boulding, 1966; Samuelson & Nordhaus, 1989).
Translating consumer choice theory to an educational market
model means that parents have preferences for the type of schools or
educational programs they want for their children. Ideally, public
education responds to parents' consumer demands by producing the
desired services and products. Parents then choose or exit schools
searching for one that matches their preferences (Hirschman, 1970).
Competition among schools for funds and students is created because
scarce resources follow students from school to school. Based on the
market principle of supply and demand, parents as consumers will force
schools as suppliers to change and develop better products and services
to meet the consumers' demands for private goods (Elmore, 1987).
17


Consumer choice presupposes both adequate information upon
which to make decisions and rational decision making. Consumers
interpret this information in light of previous knowledge and in the context
in which the information was obtained (Bettman, 1979). When
consumers process this information, they act in their self interest by
maximizing a utility to satisfy their needs for private goods. It is assumed
that the total of each consumer's private interest results in what is best for
the market (Smith, 1776). Thus, there are strong convictions about the
efficiency of markets and the wisdom of choices made by consumers
(Samuelson & Nordhaus, 1989).
School choice reformers share these convictions. They believe
the market mechanism will transform individual choices into the common
good. Therefore, the utility maximized by individual parents in choosing
a school for the private benefit of their child will result in a societal goal,
an improved education for all children.
School choice as a market-oriented reform strategy is not a simple
matter. It involves a curious mix of individual preferences versus
collective preference, private interests versus public interest, and a
competitive market versus governmental control. Therefore, consumer
choice theory with its emphasis on the market, private interest, and
individual preference, serves to illuminate only part of the school choice
picture. However, the issue is not simply one involving individual
preferences and private interest, but also the aggregate of those
preferences and the collective interest (Adler et al., 1989). Both
individual preferences and aggregate preferences can be explored with
18


welfare economic and public choice theories. Accordingly, these
theories can be used to expand the theoretical framework for this study.
The welfare economic perspective becomes useful when
considering education as a public good provided by the government for
the benefit of society as a whole (Benson, 1988). Welfare economics is
concerned with the relationship between individuals and society and
concentrates on the effect different actions have upon both individual and
societal well-being as a measure of economic efficiency. Specifically, it
deals with the aggregation of human interests into some collective notion
of social welfare (Sen, 1986).
The goals of social welfare that welfare economics tries to attain
through economic policies are the highest possible standard of living for
all, a more equitable distribution of resources, and maximum freedom of
economic choice. These goals are assumed to be universally desirable.
Liberty, excellence, efficiency, and equity values are inherent within
these goals.
Recently, there has been a move in welfare economics toward a
public choice perspective using economic methods to study and judge
welfare efficiency by Pareto optimality. Pareto optimality assumes that
society is making the most efficient use of its resources when no
individual can move into a better position without causing someone else
to move to a less desirable one.
Economists working in the public choice area study the collective
action of government and the problem of aggregating preferences, just
as other economists study the marketplace using economic tools
(Samuelson & Nordhaus, 1989). They merge the market orientation with
19


the political arena, believing there is no reason to expect that the motives
of individuals in the market and political sector differ (Buchanan, 1984).
Like the market model and consumer choice theory, individualism is the
point of departure. The fundamental behavioral hypothesis of public
choice is that individuals seek their own interests and act in a rational
way while trying to maximize utility. This is analogous to the basic
behavioral assumptions about consumers in market theory (Smith 1776;
Tullock, 1987).
Public choice theory views voters, bureaucrats, and politicians as
consumers and producers acting both in their own self interest as well as
in the public interest. These concepts easily transfer to school choice
policy. Elected school board members and state legislators are
politicians making decisions as individuals on public goods in the public
interest. School administrators and teachers are bureaucrats making
decisions on the allocation of public goods and acting in their self interest
to perpetuate their employment. Parents are analogous to voters making
individual school choices for their private interests. At the same time,
these collective school choices affect the public interest in education. All
these public choice actors participate in either formulating or
implementing school choice policy.
Although different actors are assumed to act in their own self
interest, public choice theorists maintain that differences in the
environment in which these actors interact restrict the realization of the
actors' interests (van den Broeck, 1988). When making choices which
affect both private and public interests, individuals may react differently
than normally is assumed in a market model (Buchanan, 1984).
20


This purview of public choice theory provides a point of departure
for the study of school choice. Public choice assumes that parents
choosing schools are cognizant that they are acting in separate
capacities when they pursue private and public interests. Moreover,
public choice assumes that when parents choose schools they
understand they are making a decision for the public, of which they are a
part (Buchanan, 1984). This assumption is different from consumer
choice theory where each person acts as a consumer in their own self
interest, unaware of the aggregate results of consumer action.
Public choice researcher Tollison suggested one look at the
revealed choice behavior of individuals as the basic informational inputs
to determine the "goodness" or "badness" of social policy (Buchanan &
Tollison, 1984). Therefore, to understand the effect of school choice
policy one should study the behavior of parents.
To understand the phenomenon of choosing schools, one
investigates the individual utility parents maximize in' a consumer sense
by using consumer choice theory to explore individual preferences, self
interest, and private goods. Expanding the exploration of school choice
to include the "curious mix of individual preferences versus collective
preference, private interests versus public interest, and a competitive
market versus governmental regulations," welfare economic and public
choice theories are added to the conceptual framework. From this
perspective, individuals are viewed not only maximizing private interest,
but also having a role in assuring what is good for society. Therefore, for
school choice policy to work effectively as a reform strategy it must
support market assumptions and also promote the social welfare.
21


School Choice Reform in Colorado
Market notions of school choice have been explored in Colorado
throughout the 1980s. Since 1984, recurring drives to get a
constitutional amendment approving a voucher program funding private
and parochial education has failed in alternate years. An innovative
post-secondary school choice statute was passed by the state in 1987. It
allowed public funds to pay tuition at state colleges and universities for
high school students taking college courses (Nathan, 1989c). Since
1988, four school choice open enrollment bills have been introduced into
the state legislature. The latest attempt was successful and Colorado
became the first state to mandate school choice by open enrollment
within school districts. After heated debate and on the brink of failure,
this school choice policy was passed in the last days of the spring 1990
session as a rider to the School Finance Act, House Bill (HB)1341
(Gavin, 1990; Roberts, 1990). Now part of Colorado law, parents have
the right to choose any public school within their school district, limited
only by space availability and court-ordered desegregation guidelines.
The law also provided for open enrollment between three school districts
as a pilot program.
Even prior to passage of HB 1341 mandating intra-district open
enrollment, nearly 4000 Colorado students chose schools outside of their
district. Currently, 133 of 181 school districts extend the opportunity for
school choice to students from other districts by not charging tuition
(Bingham, 1991). More families exercise school choice in Colorado than
22


do families in Minnesota, which mandates cross-district open enrollment
(Burke, 1991).
In 1991, the Colorado legislature considered a bill extending the
post-secondary enrollment option to funding private college tuition, along
with a second bill changing the controversial time restrictions on sports
participation imposed on secondary students who transfer schools under
HB1341. Both were defeated. A clarification of the 1990 school choice
bill was approved. After interest groups for the handicapped pressured
school districts to alter physical facilities and offer special programs
allowing handicapped students access to the programs of their choice in
any school within their district, the legislature passed HB 1326 to clarify
that this had not been the intent of HB 1341. Colorado school districts
were not required to provide any "choice" that did not exist prior to the
passage of within-district open enrollment.
School choice activity continues in the state. Currently the
legislature is considering HB 1299. That bill proposes a statewide
network of independent public schools operated under the aegis of the
state department of education and funded by local school districts. In
addition, all school districts are developing local school choice policies in
compliance with HB 1341. This makes Colorado fertile ground to explore
the characteristics of parents who make school choices.
Research Methodology
To study school choice within the public schools, this dissertation
constructs a conceptual framework which is compatible with public policy
23


values and market concepts. The feasibility of this framework was tested
in an empirical study of the behavior and attitudes of parents who have
the opportunity to choose public schools for their children under school
choice policies. A sample was taken from a population of parents who
currently have at least one child in a school district offering school
choice.
After a review of past school research, a list of essential attributes
for the data source was developed by the researcher. The researcher
chose a school district that reflects those attributes as the research site.
That district then drew a random sample of 10% of the parents who have
children in each district school.
The information on parents' school choice behavior and their
attitudes was collected by using a survey instrument. The questionnaire
format was chosen to standardize the instructions and questions. The
researcher developed the written questionnaire. It was then pilot-tested
to insure its effectiveness and clarity on a separate random sample of
100 parents who have children in each district school.
The questionnaire asked structured forced-choice questions about
the school choices parents made, the alternatives they considered, and
the information they had available. This permitted data collection on the
extent of parents' knowledge of their right to choose schools, their
perceptions of the choice policies and procedures, and on parents'
information sources. Parents were asked to assess their chosen school
compared to other schools in the district. This method surveyed parental
school preferences which had been suggested in past research to be
part of parents' utility maximization in school choice.
24


The data were collected principally via the commonly used Likert
scale. Since the purpose of this study was to compare the preferences
and utility functions of different groups of parents, the Likert scale
provided a comparison of the degree to which respondents agree or
disagree. The survey also gathered demographic data on the education
level, occupation, and ethnicity of the head of the household.
The questionnaire was mailed to 1,952 homes. The researcher
systematically followed up the survey by a telephone survey conducted
on a random sample of 100 parents who did not respond to the mailed
survey. Parents were asked to volunteer their name and telephone
number when they completed the questionnaire. This made it possible to
check the validity of the responses and provided sources of possible
explanatory interviews, if that was deemed necessary. In addition, the
size of the sample was large in hopes of capturing representatives of a
more diverse population than has been accomplished in some other
school choice research.
The survey data were entered into a computer readable format.
Data analyses used the Statistical Package for Social Science (SPSS)
(Nie, Hull, Jenkins, Steinbrenner, & Brent, 1975).
Structure of the Study
This study was written in standard dissertation format. The first
chapter introduces the topic and gives the rationale for the study.
Chapter 2 reviews the literature related to school choice and the
conceptual framework. Research methods are explained in chapter 3.
25


Chapter 4 details and analyzes the data and reports, interprets, and
discusses the findings on consumer behavior. Conclusions, implications
and recommendations are presented in chapter 5. The final chapter also
suggests the direction for future school choice research.
26


CHAPTER 2
REVIEW OF THE LITERATURE
Every individual endeavors to employ his capital so
_that its produce may be of greatest value. He generally
^neither intends to promote the public interest, nor knows
how much he is promoting it. He intends only his own
security, only his own gain. And he is in this led by an
invisible hand to promote an end which was no part of his
intention. By pursuing his own interest he frequently
promotes that of society more effectually than when he
really intends to promote it.
Adam Smith. The Wealth of Nations (1776)
Introduction
t School choice policies extend Adam Smith's concept of markets
f
and consumers to education as a method to improve schools. As policy
makers consider school choice, the following questions arise: Will the
application of Smith's long-standing economic theories to schools
promote "more effectually" the interests of society? Will parents acting in
their own self-interest as consumers, "promote an end which was no part
of [their] intention," and what will that "end" or product be: better or worse
schools?
This chapter explains the school choice debate and reviews the
literature on markets, consumers, welfare economics, public choice
economics and school choice. The chapter begins with a brief overview


of school choice opportunities. Section 2 explores the school choice
debate. It presents the dual role parents assume as consumers and
citizens and the dilemma these roles create in reconciling private and
social needs in education. The literature related to public and private
goods and interests is included in this section. Section 3 presents
welfare economic theory, public choice theory, and the Tiebout Model.
Section 4 explores the theory of choice including the concept of utility as
the foundation of contemporary thinking on consumer behavior. A review
of the research on consumer choice is in section 5, followed by the
review of school choice research as it relates to parents' roles as
consumers in section 6. That review includes school choice research
findings on the choice process and information acquisition. Section 7
discusses possible utility functions that are pertinent to school choice.
Finally, conclusions are drawn from the literature review.
Overview of School Choice Opportunities
After completing the first review of school choice literature in 1984,
Mary Raywid found that parents have been given the right to choose
schools for their children in different ways and for a variety of purposes.
School choice opportunities range from the simple and narrow
perspective of a mini-magnet program within a neighborhood public high
school to the broad and complex perspectives of Minnesota's state-wide
open enrollment plan and Chubb and Moe's (1990) voucher system
advocating choice among all public and private schools. There are many
methods of school choice, many variations of school choice options, and
28


many ideological perspectives used by supporters and critics (Finn,
1986; Maddaus, 1987/1988).
Maddaus in 1988 and Martin and Burke in 1990 categorized the
many school choice options. Maddaus found seven alternative ways
choice may be offered. Five of these exist within the public schools:
neighborhood schools, magnet schools, voluntary transfer, open
enrollment, and inter-district transfers. Two methods extend choice
opportunities to private schools in the form of tuition tax credits and
educational vouchers.
In a more extensive look at school choices, Martin and Burke
(1990) divided choice options into two categories: external and internal.
External options give parents the opportunity to educate their children in
programs outside the public system by using vouchers, home schooling,
private-parochial education and parent-run private schools. Internal
options within the public system are open boundaries, post-secondary
enrollment for high school students in higher education, second chance
programs for at-risk students or drop-outs, charter schools, open-
enrollment districts, controlled enrollment options, magnet schools, and
alternative programs.
These different types of choice have been given great attention in
the rhetorical literature on school choice as writers tried to clarify the
variations within each type and to develop arguments for and against
each option (Finn, 1986; Nathan, 1989b; Raywid, 1984). Researchers
also have explored these different choice options. Aman (1989),
Archbald (1988), Blank, Dentler, Baltzell, and Chabotar (1983), Raywid
(1984), Rossell (1985), and Rosenburg (1989) studied magnet schools.
29


Boyd and Cibulka (1989), Doyle (1989), and Glenn (1989a) researched
international school choice options. Everhart (1988), Fantini (1973) and
Young (1990) studied alternative schools. Coons and Sugarman (1978)
and Chubb and Moe (1990) gave serious attention to voucher programs
while Darling-Hammond and Kirby (1985), along with Gemello and
Osman (1982) studied the tuition tax credit option.
Open-enrollment options within public schools drew the research
attention of Adler et al. (1989), Burke (1991), Nault and Uchitelle (1982),
and Uchitelle (1977). Expanding choice to include parochial schools has
been the focus of Causino (1987), Cibulka, O'Brien, and Zewe (1982),
Cogan (1979), Gratiot (1980), and Wimpelberg (1982).
The attention researchers have focused on different school choice
options has been a necessary and productive part of developing the
literature of school choice. However, less scholarly attention has been
given to the broader concern of the effect parents choosing schools as
consumers has on the social welfare (Adler et al., 1989; Boyd & Cibulka,
1989; Devins, 1989; Elmore, 1987; Levin, 1983; Manley-Casimir, 1982).
To understand the school choice debate one must look at both private
educational needs and social needs.
The School Choice Debate
Parents making choices are the building blocks of school choice
reform. While making these choices, parents assume a dual role. In one
role, they act in their self interest as consumers of private educational
goods and services. In the other, parents act in the public interest as
30


citizens. As such, they share a responsibility to supply education as a
public good. This dual role creates a dilemma in reconciling private
needs with the social needs of education (Levin, 1989). The best method
to achieve this reconciliation is open to much debate.
School choice reformers stress parents' consumer roles, their
individual preferences, private goods, and self-interest. Advocates place
their faith in the market and believe market forces automatically transform
individual self interest into the common good. In a free and competitive
market, they believe laissez faire will meet both private needs and social
needs. The extreme view of this perspective sees government's only role
as one of keeping the market competitive. Moderates who take this view
promote school choice but with some governmental regulation to correct
for market failures.
Critics who oppose the market model of school reform and
proponents of government-controlled school choice stress the parents'
citizen role in supplying education. They point to market failures as proof
that laissez faire results in a "common bad" situation rather than the
"common good." They also note that competitive markets produce an
intolerable degree of inequality (Samuelson & Nordhaus, 1989). In
addition, this camp in the debate stresses the need for governmental
control. Extremists on this side of the debate reject school choice and
want to keep a governmental monopoly. Moderates accept the school
choice concept within the public system but subject it to governmental
regulation.
The question of reconciling private and social needs is at the heart
of all questions on the effect school choice will have on the social
31


welfare. These questions have been considered by Henry Levin, an
education and economics professor at Stanford University. Levin (1968,
1979, 1983, 1989) studied school choice from a combined economic and
educational perspective. He was one of the first to recognize that a
parent's right to choose schools calls forth the dilemma of reconciling
private needs with the social needs of education.
In "Education as a Public and Private Good," Levin (1989) saw the
current debate over school choice resulting from increased reliance on
the private sector to solve education's problems. Levin suggested that
public doubts about ineffective educational standards and schools'
present ability to meet future challenges have drawn education into a
global trend toward privatization.
Most of the discussion of privatization in education
pays little attention to education as a social good. They
view education primarily as a private good that focuses on
student achievement and reinforcement or extension of
family values. To the degree social benefits are deemed
important, they are often viewed as the sum of private
benefits and their distribution. (Levin, 1989, p. 216)
From Levin's observations, one can see how the "fundamentally
different assumptions about the nature of educational production ...
[and]... the purposes of schooling" play an important role in creating the
school choice debate (Levin, 1989, p. 216). In education from a private
good perspective as viewed by market enthusiasts, whatever schooling
results from the sum of individual parental preferences adds up to what is
good for all people. On the other hand, looking at education from a
social benefit perspective, the collective action of each family's utility
maximization must promote some commonly held concept of the social
welfare.
32


To pursue these concepts, the next sub-section considers the
question of whether education is a private or a public good. It explores
writings in economics and in school choice that are relevant to the
question.
Education: A Public or Private Good
A public good benefits many or all members of society. Noted
economist Paul Samuelson pioneered the public and private good
concept. He used a lighthouse metaphor to explain the public good. "Its
beam helps everyone in sight. A business man could not build it for profit
since he cannot claim a price from each user" (Samuelson, 1980,
p. 151). Moreover, a public good is an entity that cannot be divided. It
cannot be produced successfully by individual effort at any price.
Therefore, a public good is non-excludable and non-rival (Rosen, 1988).
The national defense is a common example of a public good produced
for the general welfare. Public goods do not always have to be provided
by the government. As in private health care, the lighthouse concept of
public goods can be provided by the private market (Coase, 1988).
In contrast, a private good is produced for one person. Its benefits
are enjoyed exclusively by the individual who chooses to purchase it at a
price (West, 1982). Private goods do not always have to be provided by
private markets.
In this study, Samuelson's definition of public goods is used. He
defines them as "collective consumptive goods" which all people enjoy in
common. Each individual's consumption of such a good leads to no
33


subtraction from any other individuals' consumption of that good
(Samuelson, 1947, p. 387). Here "consumption" has a broad meaning. It
implies not only that the act of consuming by one person does not
diminish the opportunities for consumption by another, but also allows
this consumption to be in the form of external economies (Tiebout, 1956).
Levin concedes that "surely all private schools produce some
social goods and all public schools produce some private goods..."
(1989, p. 220). Considerable overlap of public and private benefits
creates confusion concerning the purpose of schooling and regulation of
the production of social goods in the private sector. Levin sees the larger
issue in terms of "how to organize schooling to produce the highest level
of social welfare that combines the production of public and private
goods" (1989, p.220-221).
While considering whether education is a public or a private good,
Levin concludes school choice falls into a nexus between public and
private goods (Levin, 1989, p. 218). Musgrave and West join Levin in
viewing education not as "a pure Samuelson public good like the
lighthouse," but as a "mixed good" combining features of both private and
public goods (Musgrave, 1980, p.78; West, 1982).
Many authors have explored this nexus between public and
private goods by comparing the public school monopoly with private and
parochial schools (Coleman, Hoffer, & Kilgore, 1982; Devins, 1989;
Everhart, 1982; Levy, 1986). Some educators, including Elmore (1987,
1991) and Nathan (1989c), conclude it is necessary for the government
to produce and supply education. This group shares a belief in
government involvement but holds different opinions on the amount of
34


choice that should be allowed within the public schools (Raywid, 1987;
Nathan, 1989d). Others, such as Coons and Sugarman (1978), Chubb
and Moe (1990), Lieberman (1989), and Schlecty (1990) argue
vigorously that government need not have a production function in
education and that schools can be privatized with government
intervention to regulate the supply of education.
Others, including Arons (1982), Erickson (1989), Michaelson
(1989), and Spring (1982, 1989), take a more libertarian position and
believe government has no business in education. This minority opinion
is argued by economist E. G. West, based on his historical research on
education in the nineteenth century. West supports the pure Smithian
market notion that no public goods are produced by education that are
independent of those produced by the aggregation of private goods. In
West's opinion, the collective preferences of the market determine public
good (1986).
These varied views originate from fundamentally different
assumptions about the nature of educational production and how the
public interest in education is best served. Writings related to the public
interest in education is presented in the next sub-section.
The Public Interest in Education
Traditionally, schools have served a variety of social needs. Levin
(1989) drew from the work of Weisbrod (1964) and Butts (1978) in
compiling the following societal needs for education: (a) a common set
of values and a body of knowledge to create citizens who can function
35


democratically, (b) equality of social, economic, and political
opportunities among persons of different racial and social origins,
(c) economic growth toward full employment, (d) cultural and scientific
progress, and (e) the national defense.
It is evident that social needs change and adapt over time while
the values supporting those needs also shift. There was, for example,
little recognition of inequities within the public school system until after
World War II. At that time, increasing emphasis on racial equality created
a need for fairness in educational opportunities which resulted in the
1950's desegregation court orders. In this example, desegregation laws
supported Levin's second societal need: "equality of social, economic,
and political opportunities among persons of different racial and social
origins" as an educational goal that valued equity.
School choice has been used to solve segregation problems.
Desegregation caused the flight of many white parents out of integrated
urban schools to suburban, private and parochial schools. This led to
experiments with specialized programs and schools to attract children of
the white middle class to integrated schools. Desegregation promoted
magnet school experiments providing school choice within the public
schools. It is curious that concerns about the impact of school choice on
the social welfare have come full circle back to questioning the inequities
that may be inherent in school choice policies.
This questioning of values in school choice arises because
families act in their own self interest and consume the private benefits of
education. Evidence suggesting the private benefits of education comes
from empirical sources (Levin, 1989). First, Levin credits Becker's
36


Human Capital (1964) in establishing that schools enhance individual
productivity and earnings. Secondly, Haveman and Wolfe in "Schooling
and the Economic Well Being" (1984) found private goods were
increased "trainabiiity," health, efficiency in consumption, and access to
information. Third, political participation and inculcation of civic values
were demonstrated in Torney-Purta and Schwille's (1986) research.
Finally, Levin (1989) himself supplied the empirical support for social
status, technical and cultural literacy, and the promotion of family values
as private benefits of education.
For over a century, the social interest in education was
emphasized over the private benefits by the common school movement.
Under this system, most children received a common education in locally
controlled public schools. However, certain families with the necessary
financial means could seek private schools. These families could pursue
their own private interest rather than those of the larger society. Only
nine to 11% of the school age children in America attended non-public
schools throughout the 1980s (Burke, 1991). As long as the group which
pursued private interests is a minority, their pursuit has little impact on the
educational monopoly or the public good aspect of education. For
example, the small percentage of children who have not been
immunized against measles posed little threat to other children's health.
However, the current problem of fewer immunized children increases the
incidence of measles to epidemic proportions in some schools and
colleges. Just like the growing number of children without
immunizations, an increase in the number of parents who can exercise
37


their private preferences in their choice of schools has implications on
the public interest in education and may affect the social welfare.
Most of the authors and researchers in school choice concede that
it affects the social values of liberty, excellence, efficiency, and equity.
The two major reviews of the school choice research by Raywid (1985)
and Maddaus (1990) question school choice's effect on equity and
excellence in education. Nevertheless, much of what has been written
about school choice and public interest is speculation. Although none of
the research has specifically explored these value-laden issues, a few
researchers have included implications to the social welfare in their
conclusions (Burke, 1991; Gerritz, 1987/1988; Maddaus, 1987/1988).
The Conceptual Framework
From the viewpoint of public goods and public interest in
education, the question arises whether the allocation of schooling that
results from a school choice marketplace will work to the advantage or
the disadvantage of the social welfare. To explore this question, this
study uses a conceptual framework taken from welfare economic theory,
public choice theory, and the Tiebout Model.
Welfare Economic Theory
Economics studies human behavior with the goal of achieving
efficiency in the use and allocation of resources. It is concerned with the
relationship between ends and scarce means which have alternative
38


uses. Welfare economic theory is concerned with the social desirability of
alternate economic states (Rosen, 1988). It concentrates on the effect of
different actions on overall individual well-being. The theory is used to
distinguish those circumstances under which markets can be expected to
perform well from those circumstances where markets will fail to produce
desirable results (Rosen, 1988). It seeks the highest possible living
standard, which is assumed to be universally desirable (Ammer & Ammer,
1984). Thus, an economy is efficient from the welfare economic
perspective when no person's satisfaction can be improved without
lowering someone else's satisfaction (Samuelson & Nordhaus, 1989, p.
748).
The welfare economic approach is an extension of
mainstream, neoclassical, microeconomic wisdom on the
workings of the free market, which is therefore the source of
its theoretical themes. This wisdom holds that a perfectly
competitive market in which individuals have perfect
information will normally produce a "efficient" solution that
is, a situation in which preference satisfaction across the
individuals in society is maximized.
Following logically from this view of the competitive
market is a prescription for the proper role of governmental
action to correct for market failures. (Bobrow & Dryzek,
1987, pp. 32-33)
Welfare economic theory is based on an individualistic social
philosophy that focuses on the preferences and satisfaction people derive
from obtaining the goods and services they highly value. This process
involves maximizing utility. The concept of utility will be defined and
explored later in this chapter.
In contrast to other areas in economics which study conditions from
the positive "as they are" perspective, welfare economics takes the
normative perspective and is concerned with resource allocations as
39


"they ought to be." It deals with major ethical and political issues of
modern society that cannot be adequately treated in a positive descriptive
science (Samuelson & Nordhaus, 1989).
This perspective was originated by A.E. Pigou in the 1920s.
Pigou, a practicing Quaker, was a World War I conscientious objector
who drove an ambulance (de Van Graff, 1987). Perhaps this unique
background influenced his work as he weighed social goodness and
satisfaction of utilities. Pigou made a distinction between private and
social goods. He believed it was possible to make meaningful
comparisons between utilities that provided private benefit and those that
benefitted groups in society (de Van Graff, 1987). Pigou wondered
whether one could construct an aggregate of human interests into some
collective notion of social welfare.
In 1906, Italian economist Vilfredo Pareto pointed out the short-
comings of measuring utility by cardinal methods. Pareto demonstrated
that an effective theory of consumer behavior and exchange could be
built using ordinal utility alone. He defined the optimum point of
exchange in a competitive market without needing to compare one's
individual utility with another's utility. Pareto concluded that an increase
in the total welfare occurs (i.e. society makes the most efficient use of its
resources) under those conditions in which some people are better off as
a result of the change, without anyone being worse off at the same time
(Eatwell, Millgate, & Newman, 1987). This state is termed the Pareto
optimum.
Pareto's work and the introduction of indifference curve analysis
by Edgeworth (1881) became the foundations of welfare economics. As
40


welfare economics developed, Bergson (1938) and Samuelson (1947)
extended the concept of utility ordering over alternative allocations using
indifference analysis.
Bergson and Samuelson created a mathematical relationship
between utility ordering and some particular set of value judgements
concerning well-being. This relationship is the social welfare function. It
summarizes society's preferences concerning the utility of each of its
members with a formula for aggregating the net benefits (utilities) that
accrue to individuals (Bobrow & Dryzek, 1987; Rosen, 1988). The higher
the number assigned to the social welfare function, the higher a
particular allocation is ranked as an utility by many individuals. The
social welfare function enabled economists to conduct an objective
analysis of the desirability of particular resource allocations and to
examine different types of value judgments (Eatwell et al., 1987).
Even with the introduction of the social welfare function, the long-
standing confusion between measurable utility and interpersonal
comparability had to be resolved to enable social decision making before
welfare economics could rest on solid ground. A considerable volume of
literature in social choice theory addresses this problem (Bobrow &
Dryzek, 1987, p. 52). Kenneth Arrow attempted to solve this social
choice problem by exploring whether it was possible to design a set of
reasonable rules to transform the opinions and desires of social group
members into a concrete choice made from the alternatives available to
them.
Arrow's "reasonable rules" are: (a) responsiveness to the wishes
of every member, (b) no member of the group acts as a dictator able to
41


impose his or her desires on others, (c) that any preference be possible,
and (d) following the Pareto Principle, if everyone in the group prefers
alternative 'A' to 'B,' then alternative 'A' should exceed 'B' in social
ordering. Arrow proved that it was impossible to design a set of rules
with these properties that would reflect the utility preference of individuals
in a social group (Eatwell et al., 1987, p.108). In other words, a
reasonable and consistent procedure for any society to choose among
conflicting social alternatives cannot not be found.
Arrow's famous treatise, the Impossibility Theorem, proved that a
social welfare function that reflects the utility preferences of individuals
cannot be developed. This disqualifies any real world aggregation
method and tells us that governments must fail in some aspect of their
preference aggregation tasks (Bobrow & Dryzek, 1987).
This scholarly search became a part of the first fundamental
theorem of welfare economics. This theory states that a properly working
competitive economy generates a Pareto efficient allocation of resources
without any governmental intervention provided there are enough
markets and all consumers and producers behave competitively (Arrow,
1951).
Within "the shade of Adam Smith's invisible hand," a competitive
economy automatically allocates efficiently, without a need for
centralized direction. However, it is society's value judgements that
determines whether the Pareto efficient allocation of resources is a "fair"
distribution of utility. Competitive markets may allocate resources
inefficiently (Rosen, 1988, pp. 51-52). Whenever markets fail to allocate
resources efficiently, a market failure occurs. Market failures include:
42


1. Monopoly A monopoly is a market structure in which a
commodity is supplied by a single agent. There, a competitive market
cannot exist because that agent has the market power and can control
prices as well as output levels. The result is that an unregulated
monopoly will fail to generate the efficient amount of output.
2. Public Goods The market mechanism may fail to force people
to reveal their preferences for public goods. This presents the
opportunity for some consumers to benefit without expense by being a
"free-rider." This can result in insufficient resources being devoted to
public goods (Rosen, 1988, p. 53).
3. Externalities Situations where one person affects the welfare
of another, for better or worse, in a manner outside the market are termed
externalities. Externalities exist when private cost benefits do not equal
social cost benefits (Samuelson & Nordhaus, 1989, p. 972).
4. Costly Information Information is needed for consumers to
make decisions. Information acquisition is influenced by individual and
situational factors. Even when some information is obtained, it may be
imperfect. When this happens, individuals do not have the kind of
information needed to make the correct ex post utility-maximizing
economic decisions. Thus, inefficient patterns of resource allocation
emerge.
Research in economics has shown that distributional and market
failure problems provide opportunities for government intervention.
However, economists disagree, depending on their value and political
orientations, on whether government interference is required or not
(Rosen, 1988).
43


t
Welfare economics looks to the Pareto optimum to judge market
efficiency rather than to any aggregate of utility preferences that are used
in consumer choice theory. However, society can have many Pareto
optimal situations which are not questioned until a shift in resource
allocations places some individuals in a less desirable position than
others.
According to Pareto, a course of action is efficient if there are
individuals who will gain from it, but none lose. Comparing theory with
the model exposes problems. At best, Pareto efficiency maintains the
distributive status quo. That is, there are few, if any, Pareto-improving
changes because someone almost always loses. To overcome these
problems, welfare economics turned to the Kaldor-Hicks criterion. It
specifies that a course of action is a correct one if potential gainers could
hypothetically compensate potential losers and retain a net benefit
(Bobrow & Dryzek, 1987). That is, if the gains exceed the losses.
There has been continual criticism of the welfare economic
approach. Most critics have focused on the fact that, although the Pareto
principle, in either its original or Kaldor-Hicks forms, is a noble goal, the
pattern of allocation and distribution in a society cannot be easily
changed in a welfare-enhancing way despite the best efforts of welfare
economists.
Despite its appeal, Pareto efficiency has no obvious claim as an
ethical norm. Society has to make value judgements on desirable
allocations and their consequences. Society may prefer another,
inefficient, allocation of resources on the basis of a value orientation such
as fairness, or some other criterion.
44


Looking at school choice from a welfare economics perspective,
one can see that individual parental school preferences have an
important effect on the social welfare. If the public interest aspect of
education is pre-defined with respect to selected societal values, then
aggregation of individual preferences may place some individuals in a
lesser position than others because their preferences do not correspond
with the "defining" preferences. This view of the collective action problem
is studied by public choice economists.
Public Choice Theory
Recently, there has been movement away from basing welfare
economics on the social welfare function and utility theory toward a
public choice perspective. This perspective uses economic methods to
study individual and collective behavior and is guided by Pareto
optimality to judge welfare efficiency.
Public choice theory is an outgrowth of welfare economics. It
attempts to construct a critically important bridge between the behavior of
individuals acting in the marketplace and the behavior of individuals who
act in the political process. This analysis of behavior in separate
capacities recognizes the single decision structure that exists in a
democracy by examining the behavior of individuals as they participate
in formulating public collective choices that must apply to all (Buchanan,
1984).
Like welfare economics, public choice economics recognizes the
self-interested rational and maximizing individual and views social
45


welfare in terms of some aggregation of individual preferences by
acknowledging only individuals with utility functions. Welfare economics
and public choice differ in the way they view governments. Welfare
economics sees the government as benevolent, public-spirited and
unitary in its role to correct market failures. However, public choice
recognizes the possibility of government failure, where government can
be part of the problem rather than the solution.
Public choice theorists apply the market model to study
governments and public decision making. One aspect of this is to study
voting as the method used by individuals in democratic governments to
make collective decision that affect everyone.
Despite differences that may exist between voting and consuming
goods and services, the two types of behavior have been found to be
quite similar (Newman & Sheth, 1987). Newman and Sheth found the
correlation points to be the following: (a) politicians offer a service and
(b) a voter pays for this service with taxes, has specific motives, stands to
benefit privately, has a choice, seeks out information, takes a course of
action, and, afterwards, experiences satisfaction or dissatisfaction.
The origin of public choice can be traced two hundred years to the
voting studies by Bentham (1789), Borda (1781), and Cororcet (1785),
followed by Carroll's work a century later. The formal theory, which is
rooted in welfare economics, is fairly recent, and was initiated by Arrow's
Theorem of Impossibility (1951, 1983). Black (1958), Buchanan and
Tullock (1962) extended Arrow's social choice theoretical base into
public choice theory. Both Arrow in 1972 and Buchanan in 1986 were
46


awarded Nobel prizes in economics for their social choice and public
choice contributions to welfare economics.
Buchanan's (1984) work focused on the distinction between public
and private choice. He found that individuals react differently than might
be assumed in a market model when they are making choices that affect
their private and public interests.
To test his beliefs, Buchanan studied the inconsistencies in the
British National Health Services (NHS). He examined the questions:
Can services that are privately valued by individuals be provided free by
the government? Are difficulties in maintaining consistency related to the
very structure of the institutions which provide services? Therefore, could
those difficulties be removed only after major reforms in the institutional
structures?
In the NHS, Buchanan found the private individual choice
behavior of users and demanders of health services was inconsistent
with their public or collective choice behavior as voters and taxpayers,
the suppliers of the service. Thus, the same person acted in two
separate roles either as a demander or supplier. This behavior is not
irrational but arises exclusively from the institutional setting for choice in
the two sides of an account. Individuals thus make choices in two
separate capacities: as buyers-sellers in ordinary markets for private
goods and services and as buyers-sellers of public goods and services
in the political process (1984, p. 34).
When individuals participate in both market decisions and political
decisions, they demand more services privately than they supply
publicly. An individual in his or her capacity as a participant in collective
47


choice must balance costs against benefits. Buchanan concluded that, in
order to have reform, the inconsistency between supply-influenced
choice, and demand-influenced choice must be eliminated and the two
types of decisions must be brought into the same framework.
Other research in public choice explored self interest and public
interest in public choices. Downs (1957) concluded that the individual
acts in his own best interest when making collective democratic decisions.
The question of whether the motivation behind the self or public interest
was based on egotistical private consumption, on altruism, on ideal
principles of ethics, or upon any combination of these factors was studied
by Hylland (1986) and Margolis (1982).
Public choice assumes that individuals, although acting in self
interest, are aware that they are making decisions for a public of which
they form a part. Therefore, individuals are cognizant that they are
selecting results which affect others and themselves. This concept is
relevant to school choice because parents make choices that effect a
public "of which they form a part." This dual role, as consumer and citizen,
which parents play in school choice reform, fits well into Buchanan's
conclusions that individuals make choices in two separate capacities as
buyers-sellers of private goods and as buyers-sellers of public goods. As
in the British NHS, the private individual choice behavior of users and
demanders of education under school choice policies may be
inconsistent with their public or collective choice behavior as a supplier of
those educational services.
Other scholars of school choice have turned to public choice theory
and Buchanan's framework. Chubb and Moe (1990) work within this
48


theoretical perspective. They emphasize those components within the
educational institution, especially its bureaucracy, that create a setting of
pervasive mediocrity. Elmore (1987) took a different direction and warned
of a need to balance the supply and demand role in education.
Public choice ways of thinking are beginning to take hold in school
choice writings and research. Public choice theory and its relationship to
school choice offers another way to study individual and collective
parental school choice behavior. This theory provides the dual
perspective on the role parents play in the resource allocation changes
that take place in school choice.
To continue the exploration of resource allocation, public goods,
and government's role, this study uses the Tiebout model. This
theoretical model is used by both welfare economics and public choice
partisans, and helps in understanding parents' school choice behavior.
The Tiebout Model
It is very difficult for markets to provide public goods efficiently
because the market does not force individuals to reveal their true
preferences for public goods. This creates an incentive to be a free rider
who benefits from, but does not pay for, public goods and services. The
usual solution to this dilemma is governmental intervention.
Charles Tiebout argues that governmental intervention is not
required to achieve efficiency in the provision of public goods. In an
important article, "A Pure Theory of Local Expenditures," (1956) Tiebout
proposed that a market-like solution to the local public goods problem
49


exists in the ability of individuals to move among jurisdictions. Individuals
"vote with their feet" and locate in the community that offers the bundle of
public services and taxes they like prefer.
Tiebout illustrated that in the same way individuals satisfy their
desires for private goods by purchasing them on the market, they satisfy
their desires for public goods by selecting a community in which to live,
and by paying local taxes for the services. Therefore, in equilibrium,
people distribute themselves across communities on the basis of their
demands for public goods. Each individual receives his or her desired
level of public goods and cannot be made better off by moving, or the
individual would move. Hence, the equilibrium is Pareto efficient. In the
Tiebout model there is no "market failure" and no government action is not
required to achieve efficiency (Rosen, 1988).
Both Tiebout's assertion that his model solves the problem of
efficiently providing public goods at the local level and the assumptions
on which he built his model have stimulated research. The Tiebout
?
model assumes the following: (a) individuals have full mobility and will
move to the community where their set preference patterns are best
satisfied, (b) individuals have full knowledge, perfect information, with
respect to the public services and taxes in the community, (c) there are
no externalities or spillover effects between communities, (d) there are a
large number of communities from which to choose, and (e) there is an
optimal community size at which the bundle of services can be
produced at the lowest average cost for the number of residents
(Tiebout, 1956).
50


Zodrow's collection of papers (1983) revisited the Tiebout model
25 years after it was published and agreed with Rosen that, although it
is unlikely Tiebout's conditions can be met, Tiebout's theory cannot be
dismissed. In fact, the classic Tiebout-type behavior of locational choice
is a good depiction of reality (Rosen, 1988).
In 1982, Gramlich and Rubinfeld tested the Tiebout model and
surveyed individuals about their desired level of public expenditures.
They found substantial homogeneity of demands (i.e. similarity in
preferences) within suburban communities located near each other. In
such a setting, the Tiebout model can be effective because people who
are dissatisfied with the current spending levels and the bundle of
public goods and services can simply move to another community
(Rosen, 1988).
This locational choice concept is important in public education
where parents, who are not allowed choice among schools, have only
one method to match their preferences for their child's public education
with a particular school. As such, they can select a residence in the
neighborhood served by a preferred public school. If the Tiebout model
is operative in school choice, one would expect to find (a) families
already residing in the neighborhood of their preferred school,
(b) parents who have a high degree of satisfaction with their
neighborhood school, and (c) parents who have similar preferences,
demands, and utility maximization behavior (Tiebout, 1956, Rosen,
1988).
In the public school arena, meeting Tiebout's conditions exactly is
not likely. Families are not perfectly mobile. Many areas do not have
51


enough communities to offer the bundle of services that suit parents'
preferences for their child's education, in addition, members of the
same communities are not mirror images of each other.
In support of Tiebout's ideas, there is considerable mobility in
America each year and metropolitan areas offer a wide range of choices
among communities and schools. Even within a community or school
district, there is considerable residential segregation by income and
exclusionary zoning laws which create choice among the public
services offered and among different allocations of public goods. In
urban areas, there are wide opportunities for individuals to "vote with
their feet" (Bobrow & Dryzek, 1987).
As a result of the unique ties between the classic school-by-
residence-assignment in public education and the tradition of children
attending neighborhoods schools, the Tiebout model is useful in
studying the educational marketplace and school choice.
The next section of this chapter explores the theory of choice. It
presents the concept of utility as the foundation of contemporary thought
on consumer behavior.
The Theory of Rational Choice
The fundamental problem in economics is that resources available
to people are limited relative to people's wants. The theory of rational
choice shows how people make decisions in the presence of such
scarcity. It relies on the premise that people tend to choose goods and
52


services they value highly. The theory assumes people act rationally in a
manner that maximizes their well being.
Welfare economic theory is based on an individualistic social
philosophy focusing on preferences and how people maximize utility.
People have different preferences and choice theory puts these
preferences at center stage; taking them seriously and at face value. It
assumes people know best what gives them satisfaction (Rosen, 1988).
However, it is not always possible to discern a person's true
preferences, especially for public goods. With public goods, "rational"
consumers may understate their preferences in hope of a free ride by
enjoying the goods while avoiding the tax (Tiebout, 1957, p. 417).
Another problem is the difficulty in calculating the collective results of
many people acting upon their preferences. Finally, there is the question
of whether any social institution can satisfy people's preferences in the
same sense that a private goods market does.
To further explore the theory of choice and understand how
rational consumers divide their limited resources to gain satisfaction, one
turns to a scientific construct used by economists. That is the classic
concept of utility.
Utility
People tend to choose the goods and services they highly value.
To describe the source of this value, economists developed the notion of
"utility." This concept arose from studies on mathematical probability
(Bernoulli, 1738). English philosopher Jeremy Bentham introduced the
53


utility concept into the social sciences in 1789. Economists Samuelson
and Nordhaus (1989) recognize it as "one of the intellectual landmarks of
the last two centuries."
Jeremy Bentham created this verse to identify the central tenets of
utility that continue to inform scholars and economists today.
Intense, long, certain, speedy, fruitful, pure -
Such marks in pleasures and in pains endure.
Such pleasures seek in private be thy end.
If it be public, wide let them extend.
Such pains avoid, whichever be thy view;
If pains must come, let them extend to few.
(Jeremy Bentham, 1789, p. 38)
Bentham identified utility as the source of value. It was that
property in any object, whereby it tends to produce benefit, advantage,
pleasure, good, or happiness. To Bentham this was "the occurrence of
pleasure and the absence of pain" (1789, p. 12). Bentham's studies on
legislation led him to the principle that utility promotes the greatest
happiness for the greatest number, a modern day interpretation of
Bentham's principle is "what will make the most people better off"
(Samuelson & Nordhaus, 1989). In contemporary terms, utility is defined
as the usefulness of a good or service, or the satisfaction it yields
(Eatwell et al.,1987).
As we move toward the twenty-first century, the concept of utility
has retained a central place in the theoretical debates that dominate
economics, sociology, and moral and political philosophy. The concept
skips through time, from Aristotle's early questions on value in Politics to
Bentham. In the nineteenth century, renewed interest sparked the
writings of J.S. Mill and Hume, leading classical economists, to extend
Bentham's concept to explain consumer behavior. Jevons used the
54


calculus of pleasure and pain to demonstrate how rational people based
their consumer choices on the additional or marginal utility of each good.
By 1890, Marshall used the utility concept to construct a consistent theory
of consumer behavior by measuring the utility derived by a consumer
when purchasing a product.
Although utilitarianism offers a neutral criterion to judge competing
notions of what consumers value, this view has often been challenged,
mainly because the concept of utility is subjective. As Ammer and
Ammer (1984) explain, utility varies from person to person and frequently
depends on external factors. Therefore, it cannot be objectively
measured. The methods used to measure utility have always been
contested by economists. Bentham and his followers used the principle
of decreasing marginal utility and measured it by cardinal methods.
However, Samuelson and Nordhaus (1989) conclude that, so far, no
device has been invented that measures utility. Thus, the model is
useless in predicting actual choice. The difficulty in measuring
interpersonal comparisons of utility led economists to use ordinal rather
than cardinal measurement methods and to begin the search for
alternate approaches. The search process produced the discovery by
Vilfredo Pareto in 1906 that market demand theory could be analyzed
without the utility concept.
In the early twentieth century, studies confirmed that consumers
can make interpersonal comparisons and judge the combination of
products that give them equal satisfaction (Thurstone, 1931; Hansen,
1972). This led Hicks and Allen in 1934 to present a theory of consumer
behavior involving only ordinal comparisons of utility. In their famous
55


article, "A Reconsideration of the Theory of Value," Hicks and Allen used
indifference curves to study utility (Hicks, 1946). Indifference curves, as a
way to graph equal utilities, were originated by Edgeworth (1881) and
developed by Pareto (1906). This provided a framework to create multi-
dimensional models of consumer choice, using methods such as
indifference analysis and revealed preference theory (Benson, 1955;
Black, 1958; Wagner, 1959).
Utility remains the foundation of contemporary thinking about
consumers. There is now a two hundred year old tradition in both
economics and the social sciences using utility as the source of value.
Although the concept has been challenged, it has not been dismissed
and the questioning itself has led to the development of alternative
approaches (Hansen, 1972; Samuelson & Nordhaus, 1989).
Inquiries and writings on utility have expanded the examination of
school choice. When parents select a school of their choice, they try to
acquire some good or service that they value highly for their children.
This source of value may vary from family to family as parents differ in
their preferences and in their utility maximization. One family may desire
high student achievement test scores, another firm discipline, and still
another may want a school located close to a daycare center.
The subjective nature of utility demonstrates the complexity of
school choices. Many families may want school quality, but the manner
in which they define and assess quality may be quite different. In
addition, parents' preferences may depend on external factors. For
example, the cost and inconvenience of providing transportation may be
56


important to parents when they select their school of choice and force
them to compromise other school quality utilities.
The behavior of parents as they choose schools can be observed
and examined to discover parents' preferences, their utility, and the
factors that affect their maximization of that utility. With this information,
the researcher may then be able to characterize consumer behavior and
speculate on the culminating effect on schools from parental choice.
Consumer Choice Theory and Research
The individual consumer in the market determines what items will
be produced, how they will be distributed and what will be paid. This
consumer sovereignty is the focus of both utility theory and consumer
choice theory. What consumers demand rules the market.
All consumer theory is built on the assumption that consumers are
fairly consistent in their task and actions, that people are not exactly alike
but have different preferences and hold dear different salient values.
Consumers will therefore demand different products to satisfy their wants
and will allocate their limited resources to obtain the greatest satisfaction
or utility (Samuelson & Nordhaus, 1989).
Consumer behavior has been a fertile ground for researchers,
economists, and marketing specialists. Since Jevons' first theories on
consumers in the early 1800s, nearly 50 different models have been
proposed. Hansen identified 28 existing models in 1972 and Gerritz 45
models in 1988. After reviewing these models, it is evident that the
different ways of thinking about consumer behavior overlap or merely
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delve deeper into certain key elements that are contained within the
more popular models. Most of these models share three components:
the underlying assumption of utility maximization, an exploration of the
decision-making process, and an exploration of information acquisition
and utilization. Major contributors whose line of research includes these
three components are Engel, Blackwell, and Kollat (1978), Hansen
(1972), Howard and Sheth (1969), Kollat (1966), Nicosia (1966), Simon
(1957). These theorists vary only in their emphasis on either the
consumer decision process or information processing.
Consumer behavior researchers try to discover more about the
utility that consumers are trying to maximize, the consumer decision
process, and the information consumers obtain and use. Research in
consumer behavior suggests several characteristics that parents, when
acting as consumers choosing schools, will exhibit. One cannot expect
parents to be exactly alike. They will have different preferences
concerning the education they want for their children. These preferences
will be influenced by different values. The situations parents find
themselves in as they make school choices will also influence the
choices they make.
If consumers are sovereign in the market, the preferences parents
desire and the utility they maximize in their children's education will then
rule the school choice market. The idea of consumer sovereignty is,
however, problematic in consumer choice. If the wishes of consumers
actually control supply and demand, then whatever attributes of
schooling result from school choice are assumed to be exactly what
parents want from schools, regardless of its implications for the individual
58


or general welfare. For example, if parents do not desire their children to
attend schools with racially, culturally, or economically diverse student
populations and choose schools with homogeneous student bodies, the
result may be schools that are segregated by race, ethnicity, and wealth.
Consumer Choice: Decision Process
Consumer behavior is a sequence of choices in a decision
process (Hansen, 1972). This process of decision making has generated
a vast literature across many fields. This review looks at the decision-
making research in education and consumer economics.
In both education and economics, rationality is the prevailing
paradigm. Therefore, consumers are assumed to be rational individuals
who analyze a situation before they act. These consumers are expected
to proceed through an established step process. Initially, they identify
their goals through a ranking based on their own values. They then
specify all available alternatives, evaluate all consequences and finally
select the best alternative that achieves their goal (Estler, 1988; Hansen,
1972). This normative process prescribes the way choices ought to be
made. Criticism of this rational approach is abundant and usually
concentrates on the inability of the approach to capture the richness or
contextual characteristics of the process (Brewer & deLeon, 1983;
Cohen, March & Olson, 1972). Nevertheless, this rational decision
process remains the classic approach (Estler, 1988) and its assumptions
dominate thinking in both economics and education (Hoy & Miskel,
1987).
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In education, empirical research has focused on problems implicit
in the idealized rational model. Three problems have been identified:
(a) the multiplicity, generality, and ambiguity of goals (Estler, 1988; Lortie,
1975), (b) the human attributes that affect and compete for attention in
decision making (Estler, 1988; March & Olson, 1976), and (c) the scarcity
of accessible information coupled with the limitations of human
information processing (Bridge & Blackman, 1978; Estler, 1988; March &
Simon, 1958).
In consumer economics and in education, some research studies
have shown that consumers follow the rational procedure of problem
identification, information search, identification, and evaluation of
strategies before selecting a particular action (Brim, Glass, Lavin, &
Goodman, 1962; Gratiot, 1980; Gerritz, 1987/1988; Maddaus, 1987/1988;
Nault & Uchitelle, 1982). Other researchers present strong evidence that
situations influence consumers' behavior by causing them to vary from
the prescribed "rational" choice process (Brim & Hoff, 1957; Soskin &
Johns, 1963; Day, 1970; Bridge & Blackman, 1978; Maddaus,
1987/1988).
This variation from reality captured the attention of organizational
researchers. Organizational scholars found that the individual's own
values and the attractiveness of different alternatives added to the
complexity of the choice process. This suggests that individual and
situational factors strongly influence decision making. This led some
theorists to the post-rational conclusion that organizational decision
making is more akin to an "organized anarchy" than to a rational
60


prescriptive process (Cylert & March, 1963; Estler, 1988; Hansen, 1972;
March & Simon, 1958).
It has been suggested in the research that both individual and
situational factors influence consumer behavior. Research on consumer
choice is divided and reviewed in that manner.
Individual Factors. Individual consumers differ along an infinite
number of dimensions that cause a great deal of variation in the
consumer decision process. Age, sex, income, group membership, and
educational level are examples (Hansen, 1972). In addition, different
consumers have certain individual propensities as part of their value
structure that reflect the probability that they will act in a particular way
(Hansen, 1972). All of these individual differences provide ways to
segment or classify consumers for study.
Researchers have studied these segments to learn which ones
are helpful in analyzing consumer behavior. Popular segments and
research studies associated with them are: (a) socioeconomic status and
demographics (Frank, 1968); (b) past history (Smith, 1965; Tobin, 1959);
(c) brand loyalty (Day, 1969; Wickstrom, 1967); (d) interests (Cerha,
1967); (e) consumer image congruency (Boyd & Levy, 1963; Rogers,
1965); (f) propensity to risk (Arndt, 1968; Brim & Hoff, 1957); (g) social
class (Himmelfarb & Senn, 1969); (h) family life cycle (Clark, 1955); and
(i) individual or collective consuming units (Hansen, 1972; Matthews,
Buzzell, Levitt, & Frank, 1964).
These studies conclude that there are important individual
variables in consumer behavior and that consumers can be classified
according to these individual differences. The differences are extensive
61


and each consumer's propensity to act is tied to their own value structure.
This makes consumer behavior very complex.
Consumer choice research suggests several important individual
factors that may influence parental school choice behavior. The school
choice researcher may collect and analyze information on the parents'
income, age, occupation, socioeconomic status, past school history,
marital and family history, interests, ethnicity, race, self perception,
perception of schools, and the manner in which collective decision are
made within the families.
Situational Factors. Making an individual consumer choice is
influenced by situations going on at the time of the choice and by the
environment in which the choice is made (Hansen, 1972). Sometimes
the situation dominates the individual factors. This was confirmed by
Brim and his associates' consumer behavior studies (1957, 1962) on
child-rearing practices. These studies are closer to the topic of parental
school choice than any other found in consumer choice research. Brim
and others have presented strong evidence indicating situational factors,
separately and in interaction with individual variables, influence
consumer behavior (Brim & Hoff, 1957, Rausch, Dittman, & Taylor, 1959;
Soskin & Johns, 1963).
In public school choice, the context of the consumer process is the
local school district. There, situational variables may influence both the
market environment and consumer behavior.
Research on consumer behavior highlights the necessity to
consider situational factors and the context of the consumers' decision-
making process. Situational factors must also be considered in
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relationship to individual factors to search for an interaction that may
influence the choices parents make about schools.
While research on the decision process has not shown
conclusively whether consumers follow a rational prescriptive process, it
does tend to show that individual and situational factors influence
consumer behavior and force them to vary from the prescribed process.
Extending this thinking to parents' consumer role, their decision making
while selecting a school of choice is probably not a simple procedure but
a complex activity influenced by individuals and context.
Since there are infinite numbers of individual factors and each
parents' propensity to act is influenced by their own values, it is not likely
that different parents use the same decision process to search and select
schools. A school choice researcher must therefore look at the behavior
of different segments of parents to determine to what extent their
decision process is alike or different.
Consumer Choice: Information Acquisition and Utilization
The search for information is an integral part of the choice process
and consumer choice models study how consumers process information.
The models emphasize information acquisition and the consumer's
willingness to solicit information or to use the information they receive
(Hansen, 1972; Bettman, 1979).
Early studies on the availability of consumer information led to
conclusions that environment may narrow availability to information and
that a consumer's situation influenced the number of alternatives they
63


considered when making choices (Berelson, Lazarsfeld, & McPhee,
1954; Lazarsfeld, Berelson, & Gaudet, 1948; March & Simon, 1958).
Furthermore, each situation has its own source of information upon which
the consumer must rely (Hansen, 1972).
Considering sources of information, Engel, Knapp, & Knapp
(1966) discovered that consumers varied in their preferred information
sources. Some consumers depend upon primary information obtained
from trying the product. This may result in a tendency to continue to
select the same alternative after one has conducted an initial search
process, as takes place with brand loyalty (McConnell, 1968; Wickstrom,
1967). Other consumers rely on secondary information sources such as
mass media advertising and marketing messages in print and electronic
media (Tannenbaum & Greenberg, 1968). Still others depend heavily on
personal communication from family members, friends, or salesmen for
information before making their choices (Hansen, 1972).
Consumers also demonstrated selectivity in their information
acquisition (Copland, 1958; Hansen, 1972) and showed limitations in
their ability to process that information (March & Simon, 1958). Studies
showed that consumers seek out what they are interested in and prefer
information that supports the views they held previously (Greenwald &
Sakumura, 1967). Consumers also interpreted information both in the
light of previous knowledge and in the context from which the information
was obtained (Bettman, 1979).
From the consumer choice research on information, it is evident
that individual and situational differences and their interactions influence
consumers' ability to acquire and use information. Consumers' preferred
64


source of information also varies. A school choice researcher is directed
by consumer behavior studies to ask parents about the alternatives they
considered and the criteria they used in selecting or rejecting each one;
the quantity, type, and quality of information they had available; their
preferred source of information; and whether different situations
influenced their information source or their decision process.
School Choice Research: Parents as Consumers
Consumer choice assumes that all people are trying to maximize
some utility in their consumer behavior. The importance of decision and
information processing in the choices people make has been established
in consumer choice research. Research on the specific topic of parental
choice of schools has addressed this behavior in several empirical
studies.
The empirical research base for school choice is limited, with less
than 20 studies reported in as many years. Quite often researchers
explored parents' choices as they pertained to selected school choice
options, such as magnet schools or tuition credit opportunities (Aman,
1989; Blank et al., 1983; Darling-Hammond & Kirby, 1985; Kamin &
Erickson, 1981). Some studies examined the characteristics of parents
who moved outside of the public school system to private and parochial
schools (Causino, 1987; Cibulka et al., 1982; Gratiot, 1980; Kamin &
Erickson, 1981). Twelve studies that provide reliable and current
information on parental choices will be the focus of this research review,
65


while eight other studies, more limited in scope, will be used selectively
for utility, search behavior, and information processing findings.
This section reviews consumer behavior research as it pertains to
parents choosing schools. The next section covers the decision process,
the segmentation of consumers, and the individual and situational factors
that influenced consumer decision making.
School Choice: Decision Process
Nault and Uchitelle (1982) studied the school choice behavior of a
group of public school parents who were given a clear choice of two
schools located in optional attendance areas within a large suburban
school district. The schools in "Collegeville" differed by instructional
organization and in the student population's racial and socioeconomic
composition. In two investigations, these researchers explored the
parents' search among alternatives to determine whether they made
unreflective choices based on narrow criteria. Nault and Uchitelle
questioned whether the parents could be described as "deliberative
choosers," and, if so, what factors influenced their choices. In their
second investigation, Nault and Uchitelle expanded the study to
determine whether parents who exercised school choice were more
knowledgeable about the schools than parents whose children were
educated in assigned schools. From their findings, there is evidence that
these parents acted as rational decision makers who investigated
alternatives and weighed the consequences before making their choice
of schools.
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The "Collegeville" study documented a relationship between the
parents' socioeconomic status and educational attainment level with their
knowledge of schools and their awareness of choice opportunities.
Seventy percent of the parents were categorized as "searchers." This
propensity to search correlated with income and educational attainment.
Those parents who made school choices included 81 % of the upper-
class parents, half the middle class parents, and only 40% of lower class
parents (Gerritz, 1987/1988, p. 41).
The federally funded school choice demonstration project in Alum
Rock, California, was the focus of Bridge and Blackman's (1978)
research under the auspices of the Rand Corporation. Data was drawn
on 1500 students in grades K-6 from Alum Rock and two open-
enrollment programs in Minneapolis, Minnesota and in Mamaronek, New
York. This remains the most comprehensive attempt to describe the
parents' decision process in searching and selecting schools (Maddaus,
1987/1988).
Bridge and Blackman used a six step decision-making process as
their rational choice model. They explored whether parents first
recognized and selected a school by deliberating on their choices and
taking action. They weighed whether parents identified their alternatives
and the important attributes of those alternatives; whether they evaluated
and weighed the attributes of available alternatives; whether they
selected a school that had the highest overall preference rating
determined by the sum of the weighted attributes, and whether they
actually enrolled their children in the preferred school. Also, did parents
evaluate the results against their expectations and, finally, if unsatisfied
67


with their choice, did they reconsider the school placement (Bridge &
Blackman, 1978).
In exploring parents' decision-making behavior, Bridge and
Blackman asked:
Do parents merely judge programs as satisfactory/
unsatisfactory, or do they make fine distinctions between
DEGREES of satisfaction? The former case has been
labeled SATISFICING by Simon, and this contrasts with the
later case, which may be labeled OPTIMIZING of
maximizing outcomes. This issue is of practical importance.
If parents make only gross, good/bad or
satisfactory/unsatisfactory judgements about alternative
schools, we would expect them to shift schools much less
frequently than they would if they are trying to pick the
single BEST school. (Bridge & Blackman, in Maddaus, p.
242)
The Rand study concluded that parents' decision processing
behavior was far from any approximation of the rational choice model.
This did not support the findings of Nault and Uchitelle in more highly
educated and affluent "Collegeville". Bridge and Blackman found the
rational model was inadequate to describe the decision process due to
the variety of individual and contextual factors that influence the process.
Some researchers on school choice have found it beneficial to
look at the decision process used by parents in other developed
democratic countries which allow more parental choice of schools than
does the United States. These locations provide more opportunity for
empirical data on parents' consumer behavior (Adler et al., 1989; Cogan,
1979; Kamin & Erickson, 1981). Three studies were conducted in
Canadian provinces. In 1978 and 1979, Cogan and Erickson both
individually undertook similar school choice research in British
68


Columbia, while Kamin and Erickson together studied Saskatchewan's
school choice policy.
Cogan concentrated on choice behavior as parents chose a
schools at the kindergarten level in a middle class Vancouver suburb.
Erickson's larger study surveyed nearly 1,000 parents in two
communities where a modified state-funded voucher program gave
parents the option to choose religious or private schools for their
children. Both Cogan and Erickson analyzed the decision-making
process by examining the influence family background had on choice
behavior. The evidence from both of these studies confirmed Nault and
Uchitelle's findings linking socioeconomic status and choice behavior.
They found that lower socioeconomic status parents were less likely to
engage in the decision-making process.
Maddaus (1987/1988) found, in a qualitative research project on
school choice, that parents in this study consider an average of three
school alternatives. Most deliberated over their choice for months or
even years. Nevertheless, Maddaus' case studies highlighted the variety
of ways family and situational factors, such as financial resources and
parents' perceptions of their own competence in selecting schools,
influence decision making. Maddaus' data came from his school choice
behavior study of parents in five varied neighborhoods in Syracuse, New
York. These parents had the opportunity to use either Syracuse's
voluntary transfer program, select public magnet schools, attend private
independent or religious schools, or move their residence. Maddaus
concluded that "families appeared to engage in conscious choices
69


among schools more frequently than Bridge and Blackman would have
us believe" (1987/1988, p. 243).
The most recent research covering the decision process was
conducted in Scotland by Adler, Petch, and Tweedie (1989). Like Bridge
and Blackman and Nault and Uchitelle, Adler and his associates were
interested in parents' abilities to consider alternatives. They questioned
to what extent parents were seeking to maximize various preferred goals
in their choice of schools and to what extent they were seeking a
satisfactory alternative which meets certain defined standards. In other
words, would parents be satisficing or optimizing? The Scottish study
concluded that many parents' school choice behavior approximated the
satisficing model. Parents selected a satisfactory school from one or two
alternatives to the home school rather than pursuing an optimal choice
from a large range of possible schools.
After Scotland passed the Education Act of 1981 giving parents
stronger school choice rights than their English and Welsh counterparts,
Adler et al. assessed the consequences and implications of parental
choice policy prior to similar legislation taking affect in England and
Wales in 1988 (Adler et al., 1989). The empirical study focused on three
Scottish authorities (analogous to American school districts) where
parents chose a primary school or transferred to a secondary school.
The decision-making strategies that parents adopted were studied. Adler
found that the time and energy required for a search process limits the
parents' decision process. The study also compared the "losing and
gaining" schools. The prime motivation to change schools was either a
"push" or "pull" factor arising from the situation rather than family
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background factors that other studies had demonstrated. Adler's study
was unique in its focus on the push/pull motivational factor in school
choices. This concept demonstrated that situational factors also have
strong influence on the parents choice.
Since all parents made choices in the Scottish study, it was
unnecessary to classify the consumers by choice. The two Canadian
studies, as well as "Collegeville" and Alum Rock, used the consumer
choice market segmentation concept. Parents were classified by the
extent they participated in the choice process. Cogan (1979) and
Erickson (1986) segmented the school choice market in three ways:
(a) active searchers who go through extensive search processes to find
the school that matches the utility they wish to maximize, (b) parents who
send their child to the nearest parochial schools, and (c) parents who do
not exercise choice options and send their children to the assigned or
nearest public school. Later research studies used a "chooser" and
"non-chooser" segmentation in their samples (Darling-Hammond & Kirby,
1985; Gerritz, 1987/1988; Maddaus, 1987/1988). Each research study
on consumer choice and school choice has concluded that different
types of consumers are influenced by different factors.
In a direct marketing study, Stamoulis (1988) applied a marketing
segmentation methodology to analyze parents' motivation to send their
children to private schools. She studied 136 students in Waldorf schools
and 15 students in other private schools to develop a market
segmentation model for school choices.
Taking a different approach, other researchers searched for the
family member who makes school choice decisions. Costabile's (1986)
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research on Catholic families selecting high schools found both mother
and student to be most involved in making the choice. Maddaus (1987)
also pinpointed mothers' influence in making school decisions. Gerritz
(1987) is the only researcher who collected data on marital status. He
found evidence that single parents were less likely to make school
choices. The earlier Nault and Uchitelle (1977) study demonstrated that
families where the father had a higher education level were more likely to
transfer their children to a school of choice.
When considering the exploration and deliberation of the search
process, there is evidence that parents who choose schools follow
consumer choice researcher Hansen's findings. Hansen found the
search process follows a "least effort" rule. He implies that information
sources are selected because of their availability and for their ability to
eliminate the need for further searches. The most easily accessible
exploration and deliberation strategy will vary depending on the parents'
own salient values and situation (Hansen, 1972).
In conclusion, school choice research has demonstrated that
individual and situational factors influence the school choice process.
The evidence has not been conclusive as to whether parents will have a
propensity to search for a school or, if they do search, whether they follow
any approximation of the rational decision-making model by investigating
alternatives and weighing the consequences. It has been found that
parents with lower socioeconomic status and lower educational levels
are less likely to engage in a school choice search process. There is no
evidence to answer the inquiry of whether the decision process also
differs by ethnicity or race.
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Information is a key component in the decision process. The next
section examines what research has learned concerning the information
parents acquire and use to make school choices.
School Choice: Information Acquisition and Utilization
To embark on a decision-making process, parents obviously
require information about schools they wish to consider. The research in
school choice explores the knowledge parents have about school choice
policies and individual schools, plus the sources from which parents
acquire that knowledge (Adler et al., 1989). Most of the school choice
research is based on a rational choice model (Maddaus, 1987/1988).
Bridge and Blackman (1978) coined the term "information
imperfections" in their conclusions in the Rand study. They arrived at four
major conclusions from a survey of families who had participated in
choice programs:
1. Information levels are higher among socially advantaged
families.
2. Better educated parents put more reliance on printed materials
from schools.
3. Less educated parents put more reliance on information
gathered from personal contacts.
4. Better educated parents were more likely to be less satisfied
with school quality (Gerritz, 1987/1988, p. 52).
Weiler (1974), studied the Alum Rock demonstration project during
its voucher experiment years. Although the information was inadequate,
Weiler noted that information availability and its usefulness improved
each year as mini-magnet programs stabilized in each school (Gerritz,
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1987/1988). Bridge confirmed this fact, reporting a 12.5% increase in
parents who were knowledgeable about the voucher program between
the first and third year and a 21.4% increase in the same time span in
parents' awareness of free transportation. Still, Bridge concluded that
information problems were endemic in the experiment and seriously
affected the program implementation. The Alum Rock school district
chose not to continued the school choice program after the federal
experiment ended.
A few school choice research sites, such as Alum Rock, provided a
diversified racial and socioeconomic context. Most other research
locations have been able to provide limited data on race and
socioeconomic status. Some researchers, like Gratiot (1980), purposely
avoid the race issue by choosing a sample area with no minority
population. There is usually a disproportionate Caucasian population in
all studies which affects the reliability of the study. Only the studies by
Weiler and by Bridge and Blackman on Alum Rock have looked beyond
black and Caucasian families to include Hispanics and Asians. Burke's
recent study of open enrollment between ten Colorado school districts
included Hispanics in the sample.
At Alum Rock, the differences in information processing among
parents with different racial or ethnic backgrounds and incomes could be
explored. This led to Bridge and Blackman's conclusion that
socioeconomic status influences school choices. A decade after Alum
Rock, Maddaus' research found a disproportionate number of minority
parents in his sample were not sufficiently aware of possible choice
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alternatives and were unable to use opportunities for choice to benefit
their children (p. 283). This supported Bridge and Blackman's evidence.
Across the country in Alum Rock, Syracuse, New York City and
Minnesota,- studies on school choice have shown it is parents with
higher incomes and higher education attainment levels who utilize
information and exercise choice options.
Other research findings on the effect of information include:
1. The amount and quality of information influences school choice
decisions. This was demonstrated by Adler et al. (1989), Aman (1989),
Archbald (1988), Bridge and Blackman (1978), Gerritz (1987/1988), and
Stamoulis (1988). These researchers all reached this conclusion while
studying different populations with different types of school choice
options and while using different types of quantitative and qualitative
methodology.
2. Parents differ in their ability to gain information (Gallup & Elam,
1988; Maddaus, 1987/1988; Powell, 1980).
3. Middle income parents make better use of their social network
to gain information than do low income groups (Nault & Uchitelle, 1982).
4. Lower income parents have fewer sources of information
(Cochran & Henderson, 1985) and less time and financial resources to
get school choice information (Maddaus, 1987/1988).
Nault and Uchitelle's (1982) second investigation in "Collegeville,"
comparing parents who had choices with those who did not, found that
parents with the option to choose engaged in a search process and
learned more about schools. Most researchers agree with Nault and
Uchitelle that parents' increased knowledge about schools is a by-
75


product of the choice process. This suggests that the opportunity for
choice encourages knowledge acquisition and utilization behavior.
Sources of Information. Sources of information are perhaps the
most extensively studied area in school choice research. The amount
and type of information has been explored by Bridge and Blackman
(1978), Nault and Uchitelle (1982), Gerritz (1987/1988), Maddaus
(1987/1988), Archbald (1988), Stamoulis (1988), Aman (1989), and
Adler et al. (1989). The majority of these studies concluded that parents'
differing abilities to gain information was related to socioeconomic status,
with the different socioeconomic groups relying on different sources for
their school information.
Nault and Uchitelle's (1982) parents tended to use two sources for
their information. Seventy-two percent of the parents in their study
gained knowledge from parents who already had their children in a
particular school of choice. Sixty-nine percent gathered information from
a personal visit to the school. In 1988, parents in Maddaus' study also
used informal sources including relatives, neighbors, and friends rather
than "formal" sources. Even when the parents obtained information from
the school staff or through personal observation, their informal sources
still retained an important role, especially when they wanted to learn of
any problems between staff and students.
In Scotland, Adler and his associates (1989) used a two-stage
methodology to explore the main sources of parents' knowledge about
schools. Parents were first asked, in an unrestricted interview question,
to identify their main source of information. They were then asked to rate
the importance of eleven listed sources. From this, Adler et al. were able
76


to identify patterns for both initial and transfer school enrollment. When
responding to the open-ended questions, parents named between 1.2
and 1.7 sources and rarely mentioned a visit to a school. When given a
structured list, parents recognized more sources and selected a school
visit or a talk with a teacher as the main source of information (66.1%,
71.2% and 76.1 % in the three authorities). Other sources of information
that Adler et al. identified were personal experience with other children in
school, primary school teachers and administrators, parents of other
students, informational booklets, and people with whom the parents
worked. Although there was variation between the sources used in the
three towns, all the sources listed above ranked second or third in each
town. Adler et al. surmised that local school policies influenced
information sources, causing the responses to differ by locality.
In addition to the extent and type of sources, research on
information gives evidence that different methods of disseminating
information have different degrees of effectiveness among different
groups of parents. Maddaus (1987/1988) found that lower income
families prefer verbal sources of information and often depend upon
children, friends, and neighbors' opinions more often than official written
information provided by school districts. Lower education level parents
hesitated to use observation to make judgements about schools.
Maddaus suggests that this was due either to their own past school
experience or to a belief in their own impaired judgement concerning
school quality.
Information Selectivity and Receptivity. Consumer behavior
researchers have established that people, when selecting from available
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information sources, are receptive to some sources of knowledge while
ignoring others. People's individual differences and the environment in
which they make decisions also influences their selectivity of and
receptivity to information (Copland, 1958; Greenwald & Sakumura, 1967;
Hansen, 1972).
In school choice research, Maddaus' families demonstrated
"economy in information gathering" which resulted in limiting the school
alternatives they considered due to the time necessary for a search
process, confrontation with written rules and informal norms, the family
members involved in the decision, the family's background, and prior
history with schools (1987/1988, p. 197).
Another study had similar findings. Aman conducted a qualitative
study on choosing magnet elementary schools in 1989. With 25 families,
Aman ethnographically explored the ways parents initially learned about
and became interested in one of five gifted and talented magnet schools.
His research included the manner parents gathered information and
formulated assumptions about schools. Aman concluded that
availability, sufficiency, and quality of information was a crucial factor for
parents contemplating public school alternatives. The parents used the
informal source by depending upon other parents for information more
often than official sources. A site visit to schools appeared to be a key
source of information, if the parents availed themselves of that method.
Research has found extensive evidence that "information
imperfection" affects all parents' use of school choice policies, especially
those with lower incomes and educational levels. Attention should be
given by school choice researchers to the amount, type, and quality of
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informational sources used and the factors that affect parents' acquisition
and utilization of information.
Research suggests that the opportunity for school choice
encourages knowledge acquisition and utilization behavior. Yet, the
evidence demonstrates that individual and situational factors influence
different parents' abilities to acquire and use information. Parents with
low socioeconomic status have fewer sources of information and depend
on personal sources while preferring verbal methods for information.
This, coupled with the research showing that these parents are less like
to engage in a search process, raises the concern that these parents will
not participate in school choice.
In addition, few research sites have provided a diverse population
on which to study the influence of ethnicity, race, and socioeconomic
status on parents' information processing or to look at the situations
these parents are experiencing that may influence their consumer
behavior. Research sites with diverse populations are needed to confirm
or reject the influence of social-economic status and educational
attainment levels mentioned in past research.
Looking over the research on information and parental behavior, it
appears that a lack of information may limit consumer sovereignty.
School choice as the school reform strategy to improve schools by
empowering parents to choose schools may be seriously hampered by
parents' inability to acquire and use the knowledge needed to make
school choices.
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Utility Maximization in School Choice
Throughout the research and rhetorical writings on school choice,
school quality is assumed to be the prevalent utility that parents are trying
to maximize. School choice as a school improvement reform strategy
rests on the assumption that parents want school quality and academic
achievement for their children.
Most of the research evidence regarding the utility parents want
from school choice falls under two headings: school quality and
convenience. There are undoubtedly other utilities. Cost, religious and
moral values, and child-rearing goals have been suggested in the
literature, but limited information has been gathered on these utilities.
This section reviews the literature to discover what prior researchers
have found about which utility parents are maximizing when they choose
schools.
The Utility of School Quality
Educational excellence comes from those qualities within a school
that develop and nurture students' potential to learn. Those school
qualities include both the academic program and the school atmosphere
(Maddaus, 1987/1988). They rest upon two outcome variables from
research on effective schools: student achievement and school climate.
Academic quality is composed of curriculum, instructional
methods, teaching and administrative skills, size of classes, materials,
equipment, and physical facilities. School atmosphere is the milieu that
nurtures learning. It includes the values and morals, formal rules,
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informal norms, discipline, student behavior, care and safety, parental
involvement, and the extracurricular activities that make up the school
climate. Quality can be focused on educational outcomes such as
student achievement or it may be perceived as the result of a process-
oriented approach to education.
Research findings shed light on the utility parents maximize when
they choose a school for their children. Most studies have worked from
the assumption that school quality was the parents' goal when they
chose schools. However, the results of the research left serious doubts
that all parents are searching for school quality.
The federal voucher project in Alum Rock hoped to improve school
quality by providing parental choice, but the majority of parents involved
in this experiment did not choose schools for that reason. Bridge and
Blackman found only 32% of the parents citing school program features
and 18% school quality and school staff as influencing their choice.
Uchitelle's (1977) findings paint a rosier picture for the advocates
of school choice as a school improvement strategy. When parents were
asked to choose from a list of fifteen factors that influenced school choice,
they chose the following:
1. the general atmosphere of the schools,
2. the principal philosophy of education and attitude toward
children,
3. the school's overall curriculum and academic program, and
4. the teacher's personal teaching style and classroom skills.
All four of these factors were in the top three listed in either the first
or second investigation in "Collegeville." Parents were most concerned
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with the overall atmosphere of the school. School achievement, as a
measure of school output, was rather unimportant to these parents who
ranked it the lowest of 15 choices. The utility maximization of parents in
"Collegeville" varied by grade level in the weight placed on different
preferences. Parents of students in kindergarten through the third grade
chose school quality, as assessed by the reputation and behavior of
teachers. Parents of children in the upper elementary grades wanted
curriculum content and school-wide discipline.
Williams, Huncher, and Hutner (1983) in a national school finance
survey on tuition tax credits, found that private and public school parents,
who they classified as "active choosers," agreed on four preferences:
discipline (86%), staff (86%), academic standards (84%), and civic and
moral values (70%). A subset of these parents, who had recently
transferred their children from public to private schools, reported their
choice criteria were academic standards, discipline, and teacher quality.
Williams et al.'s findings were similar to Darling-Hammond and
Kirby's (1985) in Minnesota where they studied tuition tax credit choice
options. Academic quality was noted most frequently as the single most
important factor by all parents (Maddaus, 1990). In second place, public
school parents who chose schools listed cost, while their private school
counterparts wanted religious and moral values and discipline
standards. When these parents were allowed multiple responses, the
majority preferred academic standards, teaching staff, and discipline; all
school quality components.
Darling-Hammond and Kirby (1985) provide the only research
data on school size as a characteristic of school quality. School size was
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an important factor for 48% of the "active chooser" parents in public
schools and for 40% in private schools.
Research has shown that parents who choose religious schools
tended to maximize school quality. In 1979 Erickson's Catholic parents
desired academic quality second only to religion. Gratiot's (1980) and
Cibulka and his associates' (1982) findings concur that parochial parents
seek school quality. Catholic families in separate studies in inner-city
Chicago and a Vancouver suburb rated educational quality as most
important and ranked it above religion. Research on Catholic parents
shows a recent shift in their preference rankings away from religious and
moral values toward academic quality (Kraushaar, 1978).
More recently, Maddaus (1987/1988) found that parents have a
dual view of school quality from both an academic and environmental
viewpoint. Most of the parents in his qualitative study perceived
differences between academic programs in private, public, or parochial
schools. However, they saw little difference within academic programs
other than individual differences between teachers. In contrast, the
parents perceived significant differences in school environments.
Maddaus concluded that this supports other research on the importance
of school atmosphere, such as general school atmosphere in Nault and
Uchitelle (1982), values in Clerico (1983), and moral and religious
factors in Darling-Hammond and Kirby (1985).
Maddaus (1987/1988) found that parents of all educational and
income levels believed individual differences among teachers to be more
important than any variations in curriculum and teaching methods.
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These parents preferred small classes and thought this gave their
children more individual attention.
Other evidence supporting the notion that parents use school
quality as an utility comes from research on specific school choice
options and private school research. The magnet school research by
Blank et al. (1984) and Rossell (1985) identified curriculum options and
instructional approaches as the factors parents wanted most in choosing
magnet schools. A 1970 survey of private school students by Kraushaar
identified curriculum, teachers, and class size as the reasons parents
chose a private school.
Parents cite various school attributes as reasons they chose
schools. It is not difficult to categorize many of these attributes under a
school quality heading when they are related to cognitive learning and
academic achievement. However, as Adler and his associates (1989)
recently discovered in Scotland, parents may perceive school quality in
ways other than academic programs and student achievement. The
majority of parents in that study seemed to adopt a humanistic perspective
on school quality and were less concerned with academic achievement
than with the creation of an atmosphere supportive to the child's well-
being and the process of learning. This concurs with evidence from a
separate Scottish study by Petch where parents said they were most
concerned with the child's happiness and wanted to "avoid rowdy, rough
children and bad language" (Petch, 1986, p.39). These parents were
concerned about their children's general well-being, safety, and social
interaction. Cogan (1979), a decade earlier, also found that parents in
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