Five years of data for 451 school districts in Michigan are pooled to estimate equations explaining school district expenditure behavior upon introduction of a guaranteed tax base (GTB) plan. Hausman's (1978) specification test applied to a complex random-effects model rejects that model, while implicitly rejecting cross-sectional estimates as well. Fixed-effects estimates show that the influence of Michigan's GTB plan on school district expenditure has been so small as to be of no policy significance.
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