Relationship between School District Expenditures in Various Categories and Student Performance

OSU Department of Agricultural Economics

18 Pages Posted: 11 Jan 2001

See all articles by B. Wade Brorsen

B. Wade Brorsen

Oklahoma State University - Stillwater - Department of Agricultural Economics

Charles Jacques

American Express Company

Date Written: November 20, 2000

Abstract

The effect of school expenditures on student performance has been a subject of much study and controversy. This paper provides additional empirical evidence about the effects of various categories of school spending on student performance. An educational production function is estimated using achievement test scores to proxy school output, with socio-economic characteristics and expenditures in various categories as inputs. The data are school district level expenditures from Oklahoma. Unlike most past research, a correction is made for heteroskedasticity created by differences in school district size. The correction for heteroskedasticity leads to statistical tests with greater power. Test scores were positively related to expenditures on instruction and instructional support, and are negatively related to expenditures on student support, such as counseling and school administration. The negative effect of counseling and administration could be due to counselors taking up classroom time or administrators using classroom time with announcements or assemblies. Alternatively, the causality could go the other way. It could be that schools with problems hire more administrators and counselors. The socioeconomic variables included may not fully capture the problems that a school faces. The results do show that spending is useful when targeted toward instruction. The effect, although statistically significant, is not large. Thus, the research finds that money can matter if it is spent on instruction.

Keywords: education, production function

JEL Classification: I2

Suggested Citation

Brorsen, B. Wade and Jacques, Charles, Relationship between School District Expenditures in Various Categories and Student Performance (November 20, 2000). OSU Department of Agricultural Economics, Available at SSRN: https://ssrn.com/abstract=250948 or http://dx.doi.org/10.2139/ssrn.250948

B. Wade Brorsen (Contact Author)

Oklahoma State University - Stillwater - Department of Agricultural Economics ( email )

Stillwater, OK 74078-6026
United States
405-744-6836 (Phone)
405-744-8210 (Fax)

Charles Jacques

American Express Company ( email )

Phoenix, AZ 85021
United States

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