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The Central Role of Noise in Evaluating Interventions That Use Test Scores to Rank Schools

  • Kenneth Y. Chay
  • Patrick J. McEwan
  • Miguel Urquiola

Many programs reward or penalize schools based on students' average performance. Mean reversion is a potentially serious hindrance to the evaluation of such interventions. Chile's 900 Schools Program (P-900) allocated resources based on cutoffs in schools' mean test scores. This paper shows that transitory noise in average scores and mean reversion lead conventional estimation approaches to overstate the impacts of such programs. It further shows how a regression-discontinuity design can be used to control for reversion biases. It concludes that P-900 had significant effects on test score gains, albeit much smaller than is widely believed.

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Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 95 (2005)
Issue (Month): 4 (September)
Pages: 1237-1258

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Handle: RePEc:aea:aecrev:v:95:y:2005:i:4:p:1237-1258
Note: DOI: 10.1257/0002828054825529
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  1. Kenneth Y. Chay & Patrick J. McEwan & Miguel Urquiola, 2003. "The Central Role of Noise in Evaluating Interventions that Use Test Scores to Rank Schools," NBER Working Papers 10118, National Bureau of Economic Research, Inc.
  2. Michael Kremer & Nauman Ilias & Paul Glewwe, 2003. "Teacher incentives," Natural Field Experiments 00257, The Field Experiments Website.
  3. Eric A. Hanushek & Margaret E. Raymond, 2002. "Improving educational quality: how best to evaluate our schools," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 47(Jun), pages 193-247.
  4. Urquiola, Miguel, 2001. "Identifying class size effects in developing countries : evidence from rural schools in Bolivia," Policy Research Working Paper Series 2711, The World Bank.
  5. Victor Lavy, 2002. "Evaluating the Effect of Teachers' Group Performance Incentives on Pupil Achievement," Journal of Political Economy, University of Chicago Press, vol. 110(6), pages 1286-1317, December.
  6. John H. Tyler & Richard J. Murnane & John B. Willett, 2000. "Estimating The Labor Market Signaling Value Of The GED," The Quarterly Journal of Economics, MIT Press, vol. 115(2), pages 431-468, May.
  7. Brian A. Jacob & Lars Lefgren, 2002. "Remedial Education and Student Achievement: A Regression-Discontinuity Analysis," NBER Working Papers 8918, National Bureau of Economic Research, Inc.
  8. Joshua Angrist & Alan Krueger, 1998. "Empirical Strategies in Labor Economics," Working papers 98-7, Massachusetts Institute of Technology (MIT), Department of Economics.
  9. Thomas J. Kane & Douglas O. Staiger, 2002. "The Promise and Pitfalls of Using Imprecise School Accountability Measures," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 91-114, Fall.
  10. Joshua D. Angrist & Victor Lavy, 1999. "Using Maimonides' Rule To Estimate The Effect Of Class Size On Scholastic Achievement," The Quarterly Journal of Economics, MIT Press, vol. 114(2), pages 533-575, May.
  11. Ashenfelter, Orley C, 1978. "Estimating the Effect of Training Programs on Earnings," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 47-57, February.
  12. Brian A. Jacob & Lars Lefgren, 2004. "The Impact of Teacher Training on Student Achievement: Quasi-Experimental Evidence from School Reform Efforts in Chicago," Journal of Human Resources, University of Wisconsin Press, vol. 39(1).
  13. Orley Ashenfelter & David Card, 1984. "Using the Longitudinal Structure of Earnings to Estimate the Effect of Training Programs," Working Papers 554, Princeton University, Department of Economics, Industrial Relations Section..
  14. Chang-Tai Hsieh & Miguel Urquiola, 2003. "When Schools Compete, How Do They Compete? An Assessment of Chile's Nationwide School Voucher Program," NBER Working Papers 10008, National Bureau of Economic Research, Inc.
  15. Thomas J. Kane & Douglas O. Staiger, 2001. "Improving School Accountability Measures," NBER Working Papers 8156, National Bureau of Economic Research, Inc.
  16. Jonathan Guryan, 2001. "Does Money Matter? Regression-Discontinuity Estimates from Education Finance Reform in Massachusetts," NBER Working Papers 8269, National Bureau of Economic Research, Inc.
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