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Peabody Journal of Education, Volume 86, Issue 1, 2011

Education Cost Functions: Recent Developments in Their Estimation and Applications to Education Policy


Experts in education finance continue to deliberate over the appropriate method for deriving education cost functions. "Costing out," a process whereby states estimate a school district's ability to meet performance goals, is of increasing importance in this age of accountability. In the latest issue of the Peabody Journal of Education: Issues of Leadership, Policy, and Organizations, guest editors William Duncombe and John Yinger explore education cost functions and their implications for policy. Because policymakers use education cost functions to allocate state aid to school districts, there is great debate over which formulas most accurately account for district characteristics that influence student achievement. 

In this issue titled "Education Cost Functions: Recent Developments in Their Estimation and Applications to Education Policy," Duncombe and Yinger have done an outstanding job of compiling articles that present a diverse set of perspectives. The inspiration for this issue was a session organized by Eric Hanushek at the 2008 annual American Education Finance Association (AEFA) conference in Baltimore.  Two of the four articles in this issue were presented at the conference and then revised for publishing. 

In the first of the two papers presented at AEFA and revised for the PJE, Gronberg, Jansen, and Taylor propose best practices for education cost function analyses following a recent Texas court case in which two costing out studies calculated distinctly different funding needs. Given these disparities, the authors argue that cost function researchers must employ specific best-practice techniques to ensure the validity of their estimates. In the second paper from the AEFA conference, Duncombe and Yinger illuminate the challenges that arise when using cost functions in the educational setting and explore both the strengths and weaknesses of methods used to overcome these challenges. The authors advocate for the use of cost functions to predict school district spending, and support both their validity and reliability using data from the Missouri school district. 

The final two articles in the issue, while not presented at the 2008 AEFA conference, enrich the debate on costing out methods by providing alternative perspectives on this topic. An article by Baker focuses on how a district's racial composition affects the cost of reaching their state's performance goals. Specifically, Baker uses evidence from Missouri to support the premise that policymakers should use equality of achievement-rather than of expenditures-to ensure equal educational opportunity for students. A concluding piece by Golebiewski compares cost estimates for nine states across 26 studies. This literature survey illuminates the ways in which different education cost methods result in varied outcomes thus impacting state aid allocations to districts. 

It is our hope that this issue on education cost functions enriches the dialogue between researchers, educators, and policymakers.  The Peabody Journal of Education would like to thank John Yinger and William Duncombe for assembling this collection of work and each of the authors who contributed their research on the costing out debate.  We hope our readers find this special issue intriguing and informative.

CONTENTS
Journal abstracts are linked to titles.

Introduction to Education Cost Functions: Recent Developments in Their Estimation and Applications to Education Policy  
William Duncombe and John Yinger 
Peabody Journal of Education: Issues of Leadership, Policy, and Organizations, Vol. 86, No. 1: pages 1-2.

The Adequacy of Educational Cost Functions: Lessons from Texas
Timothy J. Gronberg, Dennis W. Jansen, and Lori L. Taylor  
Peabody Journal of Education: Issues of Leadership, Policy, and Organizations, Vol. 86, No. 1: pages 3-27.

Are Education Cost Functions Ready for Prime Time? An Examination of their Validity and Reliability  
William Duncombe and John Yinger
Peabody Journal of Education: Issues of Leadership, Policy, and Organizations, Vol. 86, No. 1: pages 28-57.

Exploring the Sensitivity of Education Costs to Racial Composition of Schools and Race-Neutral Alternative Measures: A Cost Function Application to Missouri
Bruce D. Baker
Peabody Journal of Education: Issues of Leadership, Policy, and Organizations, Vol. 86, No. 1: pages 58-83.

An Overview of the Literature Measuring Education Cost Differentials
Julie Anna Golebiewski
Peabody Journal of Education: Issues of Leadership, Policy, and Organizations, Vol. 86, No. 1: pages 84-112.