Cato Education Market Index Full Technical Report

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Executive Summary

The index presented in this report attempts tomeasure how closely existing school systemsresemble free markets and rates education policyproposals on how conducive they are to the riseof competitive marketplaces. We define an educationmarket as a system that provides the freedomfor producers and consumers to voluntarilyassociate with one another, as well as theincentives that encourage families to be diligentconsumers and educators to innovate, controlcosts, and expand their services. It is a system inwhich schools can offer instruction in any subject,using any method, for which families arewilling to pay.

One of the least surprising findings of the CatoEducation Market Index is that no U.S. state currentlyhas anything resembling a free educationmarketplace. Perhaps more surprising, few of theprevailing "school choice" reforms, which areoften described as "market-based," "marketinspired,"or even "free-market" proposals, actuallyembody true markets. It is our hope that thisindex will spur debate about the necessary andsufficient conditions for a lasting and vigorouslycompetitive education industry, and hence serveas a guide to policymakers interested in harnessingmarket forces for the betterment of children'seducational opportunities.

Andrew J. Coulson

with advisers
James Gwartney, Neal McCluskey, John Merrifield, David Salisbury, and Richard Vedder

Andrew J. Coulson is director of the Center for Educational Freedom at the Cato Institute and author of Market Education: The Unknown History