This article identifies a set of location incentives created by New York's charter school financing and accountability provisions. The authors then use regression models to examine the location of charter schools across and within districts. They find that charter schools (1) are significantly more likely to locate in districts with high operating expenses per pupil, and thus high charter school payments; (2) consistent with the incentive to attract high-achieving students, tend to locate in areas with higher levels of adult education; and (3) tend to serve fewer high-need students than the nearby traditional public schools, which is consistent with a strategy of targeting relatively low-cost students.

In addition, the authors find that charter schools tend to locate in areas with lower teacher wages, lower rents, and higher commercial vacancy rates. This evidence suggests that charter school finance and accountability policy may well influence charter school location decisions, and more generally, that charter school supply is responsive to financial considerations.