Estimating the Cost of an Adequate Education in Pennsylvania

With the advent of No Child Left Behind in 2001, states are now required to develop a clear set of performance standards that will result in an “adequate” education for students. These standards have not been accompanied by additional funding to reach these goals, which has led to school finance litigation in the courts. In response to recent litigation, various methods of calculating the cost of an adequate education have been developed. In this study, the Capstone team used Duncombe’s cost-function approach to develop an index to estimate the cost of providing Pennsylvania’s K-12 students with an appropriate education. The team estimated the effects of performance standards, district efficiency, resource prices, student characteristics and district characteristics on per pupil expenditure in each Pennsylvania school district. Model results were used to calculate a cost index, which reflects how much more or less than an average district others should spend to provide a basic, adequate education. Results are consistent with previous research, revealing variations between individual school districts, with pronounced variation when indices are aggregated to the locality type level. Furthermore, the team found that increased spending is required for urban areas, where the proportion of students who require additional resources is higher.