Will spending more money improve education quality in Nevada?

Back in January the Education Alliance of Washoe County, a non-profit funded by the Washoe County School District released a report claiming that spending was correlated with student achievement. They produced this chart as evidence.

*Source: Education Alliance of Washoe County. Click on the chart to zoom in

At first glance it appears as though spending is correlated with student achievement. Both the spending and student achievement data comes from the respected National Center for Education Statistics (NCES). As the report proclaims, no state spending above average (what a magical number average is, isn't it!) scores below average on the combined National Assessment of Educational Progress (NAEP) 8th math and reading exams.

The results were puzzling because there is little to no evidence that suggests spending more money produces higher student achievement. Something smells fishy with this chart.

Examining the chart I noticed that they were claiming to look only at states that were "similar" to Nevada. If you look carefully you'll notice that Alaska is considered a "similar" state but Texas and New Mexico are missing. As it turns out there are several states that really aren't similar to Nevada at all.

Notice any big differences between the states that are considered "similar" to Nevada?

*Source, National Center for Education Statistics. Click on the chart to zoom in.

So how did the Education Alliance calculate "similarity"?  They examined the National Center for Education Statistics student enrollment data and added the percent of black, Hispanic and Native American/Alaskan Native children together. Anyone with any combination of these minority groups between 30 percent and 60 percent of the overall student enrollment is then considered similar to Nevada.

This is actually pretty arbitrary. For example. Texas falls just outside this range, yet statistically speaking is closer on the bell curve to Nevada than Arkansas Alaska and Connecticut are to Nevada. In fact, Arkansas, Alaska and Connecticut are almost 1 full standard deviation away from Nevada in terms of the percentage of black, Hispanic and Native American students. That is a pretty big difference.

In fact, taking a look at the differences the percentage of Native American/Alaskan Natives in Alaska is 1422 percent more than in Nevada. Taking a closer look, I've adjusted the enrollment percentages to a percentage difference from Nevada. As you can see, there aren't many states similar demographically to Nevada at all.

Student enrollment percentage difference with Nevada

This evidence suggests the Education Alliance of Washoe County has produced a report with select data which bias the results in favor of more spending. In fact, the states considered "similar" to Nevada appear almost arbitrarily selected - or at least carefully selected to produce the desired results.

Finally while the Alliance wanted to control for similarities they completely ignored a host of other factors that can and should be controlled for like family income, English Language Learning status and Learning Disability status. In fact, I can control for all these factors and compare all the states together and produce a far more "apples to apples" comparison that the Education Alliance was able to achieve here. 

Stay tuned, I'll post Part II tomorrow.