Locational Variations in the Public School Teacher Supply Price

Abstract

Several stales have incorporated into the education aid formula ad hoc adjustments for differences in the supply prices of education inputs across school districts. Urban school districts often receive additional stale education aid per pupil based on the belief that such districts face relatively higher supply prices for education inputs. This article evaluates the utilization of location as an indicator of district supply price differences by presenting a model to test whether location alone is the appropriate criterion for the adjustment of state aid to reflect such differences. If other district characteristics are more influential in the determination of supply prices, then these might also be included in the state aid adjustment technique. The article compares the distributional consequences of a more comprehensive adjustment procedure which includes district characteristics with the simpler locational weighting procedure.

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