Within-district resource allocation and the marginal costs of providing equal educational opportunity: Evidence from Texas and Ohio.

Abstract

This study explores within-district fiscal resource allocation across elementary schools in Texas and Ohio large city school districts and in their surrounding metropolitan areas. Specifically, I ask whether districts widely reported as achieving greater resource equity through adoption of Weighted Student Funding (WSF) have in fact done so. I compare Houston Independent School District (a WSF district) to other large Texas cities and Cincinnati (also using WSF) to other large Ohio cities. Using a conventional expenditure function approach, I evaluate the sensitivity of elementary school budgets to special education populations, poverty rates, and school size. Next, I estimate two-stage least squares cost functions across schools to evaluate the relative costs of achieving average outcomes with respect to varied poverty rates within and across school districts within metropolitan areas. I use these estimates to evaluate whether urban core schools on average spend sufficient resources to compete with neighboring schools in other districts in the same Core Based Statistical Area. I find first that widely reported WSF success stories provide no more predictable funding with respect to student needs than other large urban districts in the same state. I also find that in some cases, resource levels in urban core elementary schools are relatively insufficient for competing with schools in neighboring districts to achieve comparable outcomes.