|The question of whether or not private schools provide a better education than public schools has been the study of many studies. The question is important because of the large amount of tax money that is devoted to public schools, and because of the impact that elementary and second education has on the workforce and the economy. The findings in past studies have been mixed. Some studies, such as Figlio and Stone (1999), have found that private schools provide a better education. They argue that private schools respond to competition in a way that public schools do not, and their analysis show that private school students perform at higher levels at lower expenditures per pupil,
especially in religious schools. Other studies have failed to find any effect of either private versus public school attendance or of difference in funding levels (Hanushek, 2001). A number of studies have examined the decision to attend a private school. Figlio and Stone (1999) found that the larger the fractions of minorities in the county, the more likely white students were to attend a private school. Long and Toma (1988) test many economic characteristics of the household that influence private-public school choice. The incorporate characteristics such as, household income, ethnicity, education and age of the head of the household head. In the South, issues of segregation and school quality are closely related to the formation of private schools. The two decades following Brown vs. Board of Education witnessed the founding of private academies in the majority of counties in Alabama, Mississippi and Georgia. Although officially open to all ethnic groups, these academies have resulted in the de-facto segregation of many rural areas. In some areas, the student bodies of the academies remain almost totally white, while public schools are dominantly African-American. One important consequence of this dual school system is that local school funding referendums often fail because those residents whose children attend private schools are unwilling to increase their own taxes to improve public schools. In smaller rural communities, this often results in two inadequately funded schools – one private academy with one or two hundred students dependent on tuition funding, and a public school funded with inadequate local tax rates. In testing for the effect of private schooling, previous studies have not distinguished among the various classes of schools. We hypothesize that there are significant differences between older, more established private schools (for example a 100 year old Jesuit school), and a small southern “academy” to subvert integration. We use dummy variables to capture this difference, allowing the effect of attendance at a small academy to differ from the effect of a public school. The null hypothesis to be tested is that established private schools and the “segregation academies” have the same effect on Test Improvement and Income. If we fail to reject we will conclude that parents had the same motivation to send their children to attend southern private academies as parents who sent their children to other schools had – a better education. Rejection of the null hypothesis will lead us to conclude that there were different motivations.