The Added Value of More Accurate Predictions for School Rankings
26 Pages Posted: 6 Aug 2019
Date Written: February 4, 2019
School rankings based on value-added (VA) estimates are subject to prediction errors, since VA is defined as the difference between predicted and actual performance. We introduce a more flexible random forest (RF), rooted in the machine learning literature, to minimize prediction errors and to improve school rankings. Monte Carlo simulations demonstrate the advantages of this approach. Applying the proposed method to data on Italian middle schools indicates that school rankings are sensitive to prediction errors, even when extensive controls are added. RF estimates provide a low-cost way to increase the accuracy of predictions, resulting in more informative rankings, and better policies.
Keywords: value-added, school rankings, machine learning, Monte Carlo
JEL Classification: I21, C50
Suggested Citation: Suggested Citation