25. Married taxpayers are more likely to have chil-
Revenue, Office of Economic Research and
dren and to have higher incomes than are single
Analysis, "Arizona's Individual Income Tax
individuals, so this probably underestimates their
Credits for Schools," p. 1.
proportion of contributions to scholarship orga-
nizations.
14. Eighty-four percent of those donors filed
claims for the tax credit. Ibid., pp. 35.
26. One common method of estimating the likely
15. Center for Market-Based Education, "Easy
change in demand for a good when there is a
Does It," Extra Credit: Arizona Tuition Tax Credit
change in the price is to consider how demand
News 2, no. 2 (February 2000): 1.
typically varies and to quantify that relationship
as the "price elasticity of demand," or the percent-
16. Trent Franks, interview with author, March
age change in demand that is typically associated
22, 2001.
with a given percentage change in price. The most
rigorous study estimating the price elasticity of
17. Mary Gifford, Center for Market-Based
demand for private school is Barry R. Chiswick
Education, interview with author, February 2001.
and Stella Koutroumanes, "An Economic
Analysis of the Demand for Private Schooling,"
18. There is no estimate of the average income of
Research in Labor Economics 15 (1996): 20937.
scholarship recipient families; however, according
Although studies estimating the elasticity of
to our interviews with representatives of the
demand are helpful for understanding the
scholarship organizations, those groups sought
dynamic relationship between the price and the
to help the neediest families.
demand for private school, their usefulness for
estimating the likely effects of the tax credit in
19. David Breneman, Liberal Arts Colleges: Thriving,
Arizona is limited. Chiswick and Koutroumanes's
Surviving or Endangered? (Washington: Brookings
analysis uses data on the variation in tuition
Institution, 1994), p. 39.
prices throughout the country. The response to
the natural variation in prices in different states is
20. The private schools that responded to our sur-
likely to be different from the effects of a program
vey may differ from the overall private school uni-
providing scholarships primarily to low-income
verse. For example, it is possible that larger
parents. For a discussion of the problems associ-
schools responded to the survey more frequently
ated with using this information to project the
than did smaller schools since the large schools
impact of the Arizona project, see Jennifer Jacoby
would be more likely to have the administrative
and Carrie Lips, "The Arizona Private School
capacity and time to complete a survey. It is also
Tuition Tax Credit: Increasing Access, Promoting
possible that the responding schools were more
Competition," Kennedy School of Government,
likely than the nonresponding schools to have
Harvard University, April 3, 2001 (on file at the
scholarship beneficiaries and therefore were more
Kennedy School or available upon request).
interested in and responsive to the survey.
27. To be eligible for a scholarship, families must
21. U.S. Department of Education, Digest of
be below 270 percent of the poverty line and will-
Education Statistics 2000 (Washington: Government
ing to contribute at least $1,000 year toward their
Printing Office, January 2001), NCES-2001-034,
child's education. In 1998 parents of more than
Table 169, http://www.nces.edu.gov/pubs2001/
1.25 million students applied to the Children's
digest.
Scholarship Fund in the hopes of receiving a
scholarship. Although the fund could afford to
22. Monsignor Edward Ryle, interview with
award scholarships to only 40,000 children, the
author, March 8, 2001.
number of applications suggests that there is a
significant demand for financial assistance
23. This is the estimate of the expenditure per pupil
among lower-income families. This demand was
in public elementary and secondary schools in the
particularly pronounced in urban districts. In
fall of the 199798 school year, according to the
fact, the fund estimates that 33 percent of eligible
U.S. Department of Education, Digest of Education
parents applied in Washington, D.C., 26 percent
Statistics 2000, Table 169. Although it is likely that
in Atlanta, 20 percent in Los Angeles, 44 percent
the expenditure per pupil has increased since that
in Baltimore, and 29 percent in New York. See Ted
time, in order to conservatively estimate the state's
Forstmann, "Break Up the Education
current and future savings, we assume that per
Monopoly," Wall Street Journal, September 9, 1999;
pupil spending remains constant.
Joseph A. Califano Jr., "A Gauge of Distress with
Public Schools," San Francisco Chronicle, May 6,
24. Bureau of the Census, "Projections of the Total
1999; and Richard A. Melcher and Aaron
Population of States: 1995 to 2025," www.census.
Bernstein, "Itching to Get Out of Public Schools,"
gov/population/projections/state/stpjpop.txt.
Business Week, May 10, 1999.
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