Yilmaz, K: Essays on Education and Individual Decision Makin

The second half of the twentieth century marked the most dramatic change in U.S. education system. A large number of school districts have been eliminated through consolidation, many states have been forced to alter their reliance on property taxes to finance public schools, etc. How to finance public schools is a difficult and contentious question. The first essay develops a framework for assessing the impact of governmental involvement on K-12 education system.The wage gap between a college graduate and a high school graduate has widened recently. It is, thus, natural to compare higher education policies to some other alternative redistribution schemes such as wage subsidies. The second essay develops a general equilibrium model and compares higher education subsidies to wage subsidies and negative income transfers. The most common misspecification of binary choice models is structurally inconsistent with strategic interaction. The last essay characterizes the misspecification induced by these models and recommends researchers to avoid logit or probit models if the data generation process is believed to involve strategic interaction.