Dennis Epple

After an early interest in environmental economics, research on the Tiebout hypothesis,[16] led Dennis Epple to adopt a perspective framed by competition between different localities;[17] this perspective is present in much of his research on public and political economics, including school competition. In further research on interjurisdictional competition with Thomas Romer and Radu Filimon, Epple has explored the conditions under which there is an equilibrium between mobile consumers' choices in terms of housing location and public goods provision[18][19] and how much scope for local redistribution there is if taxpayers are mobile[20] or differ in preferences and incomes.[21] In research with Holger Sieg (and Thomas Romer) in the late 1990s and early 2000s, Epple has further investigated the estimation of structural general equilibrium models of interjurisdictional competition.[22] Corresponding applications, e.g. in the Boston Metropolitan Area, have found evidence of sophisticated voting behaviour in line with households' sorting into communities with similar public spending preferences and rejected myopic voting.[23] Finally, in work with Richard Romano during the mid-1990s, Epple has studied how the presence of private alternatives affects public service provision in theory, finding (among else) that the public provision of services without restrictions on privately purchased supplements will be preferred by a majority of households relative to purely market or government-based provision systems, would maximize public and private expenditure on the public good, and be opposed by both poor and rich households.[24][25]

In the 1990s, Dennis Epple and Linda Argote contributed substantially to the theory of organizational learning. While Epple and Argote observe learning curves in many manufacturing organisations, they also observe considerable variation in the extent to which organisations' productivity increases in production, which they attribute to differences between organizations "memories", employee turnover, economies of scale and knowledge transfers from other products and organisations.[26] [27] Such transfers of knowledge are also observed across production shifts within the same plant[28][29] and across stores owned by the same franchisee.[30]

In 1998, Epple and Richard Romano developed a seminal model of competition between tuition-financed private schools, tax-financed, tuition-free public schools and students that differ in terms of ability and income. The model predicts that private schools will attempt to vary tuition to attract relatively able students through tuition discounts as less able yet wealthy students benefit from the educational peer effects due to their more talented but poorer peers.[31] With regard to public and private schools, these predictions are borne out by later work with David Figlio, which moreover asserts that students' income plays a stronger role in determining placement in the hierarchy of private schools the more public school expenditure falls.[32] In an extension, Epple, Romano and Elizabeth Newlon study the effect of student tracking on school competition and predict that tracking would increase the share of high ability students in public schools but also push wealthy, low-ability students into private education, which attracts the wealthiest and most talented students.[33] These findings have led Epple and Romano to caution that the introduction of municipal school choice programmes may drive wealthy households out of the city centers into the suburbs.[34] To prevent private schools from "skimming off" the wealthiest and most talented students, they argue in favour of sophisticated combinations of tuition floors and ceilings, which allow school vouchers to provide the benefits of school competition without making participation in the voucher system compulsory or abiding very high levels of educational stratification.[35] Finally, Epple's and Romano's work on the impact of educational peer effects on student sorting into private and public education has also been applied (together with Holger Sieg) to higher education, which also witnesses the emergence of a hierarchy of schools in terms of quality that is associated with corresponding stratification among students by income and ability.[36][37]