Causality Tests for Public School Performance and Funding

This paper seeks to shed light on the role of school funding in individual school performance. A unique data set is utilized for the Metropolitan Nashville – Davidson County School District in Tennessee, known colloquially as Metro. In 2005 the Metro school board undertook the task of breaking down individual school spending levels by funding source. The resulting 2004-2005 financial data are combined with academic test scores and demographic data for 2003-2004 and 2004-2005 academic years for each of 70 elementary schools. Econometric tests are then conducted to examine whether contemporaneous test score performance is determined by funding, or whether funding is determined by prior performance, or whether other school characteristics influence both. Key words: education, public schools, performanc