Lori L. Taylor

Budget-Constrained Frontier Measures of Fiscal Equality and Efficiency in Schooling

Equality and efficiency are key issues in educational reform. Here the authors analyze the efficiency and equality consequences of various school finance reforms using a cost-indirect output distance function. This function readily models multiple-output production under conditions of budgetary constraint, and provides a natural measure of performance that is closely related to Farrell-type measures of efficiency. The analysis suggests that despite school district inefficiency, finance reforms can affect student achievement. However, any potential gains in output from redistribution are dwarfed by the potential gains from increased efficiency. More strikingly, the analysis demonstrates that budgetary reforms designed to equalize expenditures could actually increase the inequality of student achievement.

Alternative Assessments of the Performance of Schools Measurement of State Variations in Achievement

Evaluation of the efficacy of school policies requires measures of student performance across schools and states, but conventional approaches to constructing the relevant data can be very misleading. This paper develops an approach to estimating marginal school effects at the state level. It then documents and estimates the magnitude of biases introduced by commonly employed estimators of school quality. Direct estimates of achievement growth, or value-added, are shown to be far superior to any alternative correction that is commonly employed. Especially at the state level, nonrepresentative data such as aggregate SAT scores provide very biased measures of school quality differences-even when statistical adjustments for demographic differences and varying participation rates are employed.

The Adequacy of Educational Cost Functions: Lessons From Texas

Adequacy studies based on cost functions have come under attack. A recent Texas court battle featured two cost function studies that reached markedly different conclusions about the additional funding needed to meet designated performance goals. Some critics see such disparities as indicators of a general futility in the whole education cost function enterprise. We argue that the more appropriate conclusion is that it is critically important to demand best-practice techniques from any analyst of educational costs. This article uses the Texas litigation studies as a lens through which to explore best practices in the estimation of educational cost functions. The analysis highlights five key decisions that researchers must make when using the cost function methodology in an educational setting and explores the implications of the various possible choices using recent data on public schools in Texas. As the analysis demonstrates, some common practices in cost function analyses of education are not best practices, and these deviations from best practice can have a significant impact on the estimated cost of an adequate education.

THE RELATIVE EFFICIENCY OF CHARTER SCHOOLS

This analysis compares the technical efficiency of charter school primary and secondary campuses with that of comparable campuses in traditional Texas school districts. Charter schools are hybrids-publicly funded, but not required to meet all the state regulations releant for traditional schools. Student performance is measured using value added on standardized tests in reading and mathematics, and efficiency is measured using the input distance function. The analysis suggests that at least in Texas, charter schools are substantially more efficient than traditional public schools. Copyright

Comparable Wages, Inflation, and School Finance Equity

A ComparableWage Index (CWI) is an attractive mechanism for measuring geographic variations in the cost of education. A CWImeasures uncontrollable variations in educator pay by observing systematic variations in the earnings of comparable workers who are not educators. Together, the 2000 census and the Occupational Employment Statistics survey support the construction of just such an index. The resulting panel of index values measures wage levels in all parts of the United States from 1997 through 2004 and reveals substantial variation in purchasing power both across school districts and across time. Such inequalities undermine the equity and adequacy goals of school finance formulas. If states were successfully directing additional resources to school districts in high-cost environments, then measured inequality within states should fall when differences in purchasing power are taken into account. Instead, cost adjustment widens the spending gap in all but a handful of states.

The Identification of School Resource Effects

In the US, the federal government plays a relatively minor role in setting school policy, and the separate states are an important source of policy variation that sets the environment faced by local school districts. The variation in state policies plausibly has a significant impact on students achievement. Little is known about the magnitude of such effects, because data limitations have seldom allowed researchers to specity fully the state policy environment when analyzing school effects. Differences in overall school policies may, however, help to reconcile the contradictory findings about the effectivences of school resource usage that exist. We develop a simple theoreetical model demonstrating that the bias induced by omitting relevent state characetistics is greater in state-level analyses than it is in less aggregate studies. Our exploration of aggregation bias usibng the High School and Beyond data set suggests that aggregation to the state level inflates the coefficients that aggregation is benef...

Adjusted Poverty Measures and the Distribution of Title I Aid: Does Title I Really Make the Rich States Richer?

Federal and state governments in the United States make extensive use of student poverty rates in compensatory aid programs like Title I. Unfortunately, the measures of student poverty that drive funding allocations under such programs are biased because they fail to reflect geographic differences in the cost of living. In this study, we construct alternative poverty income thresholds based on regional differences in the wage level for low-skilled workers. We then examine the distribution of Title I revenues after adjusting poverty rates for geographic differences in the cost of living and adjusting Title I revenues for geographic differences in the purchasing power of school districts. Our findings turn conventional wisdom on its head. We find that when we fully adjust for regional differences, Title I funding patterns disproportionately favor rural school districts in low cost-of-living states. We conclude with policy recommendations for revising Title I funding formulas.

Sources of Manufacturing Productivity Growth: U.S. States 1990–1999

In this paper we employ a panel of state level manufacturing data for the U.S. to estimate productivity growth and its sources during the 1990s. Following (2002), we augment the usual Malmquist decomposition of productivity growth with a capital deepening component. We find that innovation was the primary determinant of manufacturing productivity growth in all states, but that most states ended the decade further from the production possibilities frontier than they started. Capital deepening contributed to labor productivity growth in all but three states, and explains at least half of the labor productivity growth in a dozen states.

Economic Approaches to School Efficiency

The loose connection between school resources and school outcomes has given rise to a substantial literature examining the nature and causes of school inefficiency. This article discusses the econometric approaches used to measure educational inefficiency, the data and specifications used for such analyses, and the general findings of the literature regarding the extent and determinants of school inefficiency.

Equality and fiscal equity in school finance reform

Abstract This paper examines the distributional implications of a recent decision by the Supreme Court of Texas requiring the state to devise a fiscally neutral school finance system. The authors modify traditional Lorenz curve analysis to compare the distributions of expenditures per pupil and expenditures per unit of tax effort under the 1988–1989 school finance system to those distributions that they estimate would arise under two forms of district power equalization (DPE). They find that while DPE (either with or without a recapture provision) would generate a more equal distribution of expenditures per unit of tax effort, it would not generate a substantially more equal distribution of expenditures per pupil.