Measuring quality for use in incentive schemes: The case of shrinkage estimators

• 成果类型: Article
• 署名作者: Mehta, Nirav
• 署名单位: Western University (University of Western Ontario)
• 刊物名称: QUANTITATIVE ECONOMICS
• ISSN/ISSBN: 1759-7323
• DOI: 10.3982/QE950
• 发表日期: 2019
• 页码: 1537-1577
• 关键词: Economics of education; empirical contracts; teacher incentive schemes; teacher quality; D81; I21; I28; J01

摘要

Researchers commonly shrink raw quality measures based on statistical criteria. This paper studies when and how this transformation's statistical properties would confer economic benefits to a utility-maximizing decision-maker across common asymmetric information environments. I develop the results for an application measuring teacher quality. The presence of a systematic relationship between teacher quality and class size could cause the data transformation to do either worse or better than the untransformed data. I use data from Los Angeles to confirm the presence of such a relationship and show that the simpler raw measure would outperform the one most commonly used in teacher incentive schemes.