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School expenditures and student achievement: evidence for the United States

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  • Rati Ram

Abstract

Using state-level panel data, this study estimates a simple achievement function in the fixed-effects format to explore further the nexus between school expenditure and student achievement in the United States. Five main points are noted. First, the effect of per-pupil expenditure is positive and carries high statistical significance in some reasonable models. Second, however, the positive estimate is quantitatively modest. Third, the estimates suggest a structural dissimilarity between the models for verbal and mathematics scores on the scholastic assessment test, and the effect of expenditure seems stronger for the latter. Fourth, introduction of state-specific fixed-effects dummies leads to some changes in the pattern of estimates. Fifth, methodologically, despite only minor variations in the variable values over time, the fixed-effects format generates highly significant parameter estimates in most cases. A secondary exploration does not indicate that the effect of expenditures is stronger in low-achievement contexts than in the high-achievement cases.

Suggested Citation

  • Rati Ram, 2004. "School expenditures and student achievement: evidence for the United States," Education Economics, Taylor & Francis Journals, vol. 12(2), pages 169-176.
  • Handle: RePEc:taf:edecon:v:12:y:2004:i:2:p:169-176
    DOI: 10.1080/0964529042000239177
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    References listed on IDEAS

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    1. Eide, Eric & Showalter, Mark H., 1998. "The effect of school quality on student performance: A quantile regression approach," Economics Letters, Elsevier, vol. 58(3), pages 345-350, March.
    2. repec:fth:prinin:366 is not listed on IDEAS
    3. Hanushek, Eric A., 2006. "School Resources," Handbook of the Economics of Education, Elsevier.
    4. David Card & Alan B. Krueger, 1996. "School Resources and Student Outcomes: An Overview of the Literature and New Evidence from North and South Carolina," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 31-50, Fall.
    5. Hanushek, Eric A, 1986. "The Economics of Schooling: Production and Efficiency in Public Schools," Journal of Economic Literature, American Economic Association, vol. 24(3), pages 1141-1177, September.
    6. Jonathan Temple, 1999. "The New Growth Evidence," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 112-156, March.
    7. Mark C. Berger & Eugenia F. Toma, 1994. "Variation in state education policies and effects on student performance," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 13(3), pages 477-491.
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    Cited by:

    1. Christopher C. Klein, 2007. "Efficiency versus Effectiveness: Interpreting Education Production Studies," Working Papers 200703, Middle Tennessee State University, Department of Economics and Finance.

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