Expense preference and student achievement in school districts

There is little direct evidence on the widely held view that school districts spend too few of available resources on student instruction. I find evidence of such an expense preference by assessing the effect of competition from private schools on the allocation of resources by school districts. I also examine the effects of instructional and non-instructional spending on high school completion rates. The results suggest that school districts direct too few of available resources towards instruction. The results also demonstrate, however, that money spent on instruction is highly effective when conditioned on the decision to spend outside the classroom.