How do district schools respond to competition from charter schools? To explore this question, we examine four small Arizona school districts which lost from a tenth to a third of enrollment to charter schools in a short time period. Districts lost market share to charter schools because they did not satisfy significant constituencies, thus providing demands for education alternatives. District responses to market pressure depend on overall enrollment trends, the quality of the charter competition, the quality of district leadership, and the size of the district. Districts respond to competition in various ways, including reforming curricula, changing leadership, vilifying charter competitors, and attempting to absorb those competitors. Responses suggest that competition improves schools, but that markets do not work quickly or without friction and must be understood in context.
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