Goldwater Researcher: Dubious Link Between Spending and Academic Achievement

Posted on March 24, 2003 | Type: Press Release
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Phoenix - According to a March 7 guest editorial in the Tucson Citizen, "Arizona has steadily decreased its support for public schools over the past 15 or so years until it now ranks 49th in the nation." Policymakers regularly use that Education Week ranking to suggest that Arizona taxpayers should pay more for k-12 education, assuming more spending will improve academic achievement.

But those arguments overestimate the value of increased spending, according to Goldwater Institute researcher Satya Thallam. "A high level of choice in a given system is more potent than spending for improving academic achievement," says Thallam. "In fact, there is no significant correlation between increased spending and student achievement."

Thallam reached this conclusion after performing a regression analysis using the American Legislative Exchange Council's Report Card on American Education, which ranks all 50 states and the District of Columbia in educational achievement. Accounting for differences in income, state output, and unemployment, choice in education as measured by the Education Freedom Index showed a significant positive relationship with student achievement, while per pupil expenditures showed no significant relationship.

To view the results of Thallam's regression analysis, click on the PDF link below.

"Proponents of increased spending use the Education Week ranking to suggest that increased spending will improve education in Arizona," Thallam says, "but there is little empirical evidence that more money equates to better education."

This finding is supported by the groundbreaking research of Stanford economist Eric A. Hanushek. In a meta-analysis of 65 studies, Hanushek found that 80 percent "showed either no significant relationship between spending and achievement or, in a few cases, a negative relationship." In "The Failure of Input-based Schooling Policies," published recently in the Economic Journal, Hanushek concludes, "By concentrating on inputs and ignoring incentives within schools, resources have yielded little in the way of general improvement in student achievement." That paper is available online at

Press Contact: Satya Thallam, (602) 462-5000

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