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• W3124672022 abstract "In 1993, spending on education represented 28 percent of state and local government expenditures and almost 14 percent of total government expenditures in the United States.(1) The tremendous resources devoted to education in this country underscore the need to identify the tools and programs that yield the greatest return on our investment. Policymakers have sought to improve schools in a variety of ways, ranging from increasing per pupil expenditures or teacher salaries to creating programs that send inner-city students to suburban schools. How, then, do we assess the cost-effectiveness of specific initiatives and programs? The first step is to measure the value of better schools. The goal is to develop a sound method of quantifying how investments in educational quality relate to outcomes. Once we are able to put a dollar value on improvements in school quality, we can compare policy alternatives. In this paper, I examine two methods of measuring the value of better schools. One involves following individuals over time to determine how the quality of their schooling affects outcomes later in their lives; the ocher involves calculating parental valuation of better schools today. I review the benefits and limitations of the two methods, then briefly consider how these methods might be used in evaluating policies. At the end of the paper, I note some uncertainties affecting research in the field and outline directions for future research. THE RELATIONSHIP BETWEEN INPUTS AND OUTPUTS Determining the value of better schools is more difficult than it seems. The effects of better schools are fully realized only with the passage of time: the benefits of attending a very good elementary school, for example, may stretch over a lifetime. Nevertheless, assessing school value is easier if we break the task down into two stages--first, determining the relationship between inputs to a school and outputs, and second, determining the dollar value of this increased output (see figure on page 88). Inputs to a school can be characterized by a number of variables. Teacher salaries, per pupil expenditures, and expenditures to achieve a particular student-teacher ratio are forms of financial input, which is what is most commonly understood by the notion of inputs. Also important, however, are the nonfinancial forms of input- the mix of students in the school (an indicator of overall peer quality), parental time and resources, and the quality of the administration. All of these variables--financial and nonfinancial--can be used by researchers as indicators of school quality. School outputs can also be measured in a number of ways. Improvements in test scores are an indicator of school success. So are financial gains, such as higher wages later in life. Intermediate to these is educational attainment: students who attend better schools may stay in school longer. Once we establish a relationship between inputs and outputs, we need to put a dollar value on the increased output.(2) In some cases, the work is already done for us: wages earned later in life are one measure of output that needs no quantification.(3) But attaching a value to higher test scores or to longer stays in school is a more complicated undertaking. One way to do this is by calculating how much people are willing to pay for a home in a location that would allow their children to attend a better school- an approach that essentially measures the capitalization of better schools in house prices. The next two sections examine in more detail how researchers use the concepts of input and output to develop techniques for measuring the value of better schools. The first technique focuses on the relationship between inputs to schools and children's outcomes later in life; the second looks at the links between inputs, outputs, and parental willingness to pay. TRACKING INDIVIDUAL OUTCOMES The advantage of following individuals over time is that you can look at a number of outcomes for each individual and assess the value of better schools in several different ways. …" @default.
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• W3124672022 date "1998-03-01" @default.
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• W3124672022 title "Measuring the Value of Better Schools" @default.
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