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Friday, April 29, 2011

To Improve Education Quality, Drop Letters from Your State's Name

As I've recently shown (numerous times actually and so have many others), spending more money is not correlated to student achievement. But guess what is?

The number of letters in your state's name IS correlated with student achievement!

Yup, the data suggests Nevada can improve low-income student achievement on the NAEP 8th Grade Math and Reading exam by nearly 3 points if we change our state name from Nevada to Ne! Granted, 3 points isn't much, but its a step in the right direction!

Check out the scatter plot of the results below:

Source: NCES, NAEP data, 2007 8th Grade Math and Reading Scores for low-income students

While spending can't even explain one percent of the variance in low-income student achievement, the number of letters in your state name can explain 10 percent of the difference. The real hoot: the relationship that we see comes with a 97.6 percent certainty that it isn't random!

What we have is a weak but statistically significant correlation between the number of letters in a state name and low-income student achievement on the NAEP math and reading exam.

Unfortunately, correlation is not causation. There is no rational reason why having fewer letters in your state name boosts student achievement. But think about this for a least there is a correlation! People claiming that we should spend more money to improve student achievement base such opinions on pure fantasy as there isn't even a correlation between spending and student achievement.

If you still think we should spend more money to improve student achievement...well, you're just crazy. You'd have a stronger factual foundation if you claimed we could improve student achievement by shortening Nevada's name.

Does increasing spending improve student achievement? Part II

Yesterday I tackled the Education Alliance for Washoe County's claim that spending more money improves student achievement. Specifically, I showed that the chart above was based on arbitrarily selected states that were in no way shape or form similar to Nevada. I also told you I'd show you how to control for similarities.

I went back to the NAEP Data Explorer and grabbed data from all states and broke down the student scores by income (Free or Reduced Lunch status) and race. As I will show you adjusting for income and race eliminates and previous appearance of some type of correlation with spending and student achievement. It also creates a far superior method of controlling for similar states than the one used by the Education Alliance of Washoe County.

My first chart (below) shows the scatter plot of all states and the low-income student scores on the 8th Grade Math and Reading exams in 2007 (I'm still using the same student achievement data). Why low-income students? Every state has low-income students but every state has different amounts of low-income students. Comparing just low-income students creates a more apples to apples comparison between states. Remember, the Education Alliance didn't control for income they just arbitrarily chose three racial categories and arbitrarily decided that similar states had 30-60 percent of the student population as these racial groups.

The scatter plot above shows that spending isn't related to student achievement. An R2 of 0.0018 means that spending only explains 0.18 percent of the differences in student achievement scores. That means nothing is going on at all. Worse still, the regression analysis shows a P-Score of 0.766. That means the relationship observed is 77 percent likely to have occurred at random.

Those results are more random than Chuck Norris begging for food by dropping you 
with a round house kick to the head.

In other words, spending more money does not improve low-income student achievement.

My next charts look at cross-tabulated reports from the NAEP Data Explorer. That is, I exam the scores of low-income African American and low-income Hispanic by state. We get pretty much the same results as above - spending is not correlated with student achievement.

Spending more money doesn't even explain 1 percent of the difference in scores of low-income African American students. There is also an 81 percent chance the relationship occurred at random. Also note there are some states missing.  Not every state has enough low-income African American students to create a large enough sample size to produce meaningful data. Two of these states, Arizona and Alaska were included in the Education Alliance's comparison but are excluded here because they don't have enough low-income African Americans in the state.

The situation is the same with low-income Hispanic students. Less than 1 percent of the relationship can be explained by spending but even then there is a 74 percent chance the relationship occurred at random. Worse still, Alabama, Alaska, Louisiana, Mississippi and South Carolina (all considered similar to Nevada) are excluded from this chart because they do not have enough low-income Hispanics in the state to reliably test.

Using more recent spending and student achievement data shows pretty much the same results.

The conclusion you should reach from this is that spending is not correlated with student achievement even after controlling for race and income status. If there is no correlation, you cannot claim any causation - in other words, you can't claim spending more money will improve student achievement.

One more thing, I'm not done skewering the Education Alliance of Washoe County just yet. Stay tuned!

Thursday, April 28, 2011

Keynes vs. Hayek Round 2

John Papola and Russ Roberts from EconStories produce the most amazing economics rap video you'll ever see. Even better than last years rap video. Check it out on YouTube here.

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.

Wednesday, April 27, 2011

If you give a Nevada Democrat a tax hike

Jon Ralston claims he's frustrated with Sandoval and Republicans for not wanting to raise taxes. After all, without taxes we might decimate essential services. (I question whether the government even knows what essential services means and question whether they effectively used resources wisely to begin with).

Ralston thinks Republicans should just give and support ending the sunset provision on the 2009 tax hikes. That alone would be worth $700 million. This seems like a politically naive sentiment; I know Jon Ralston is smarter than this. Let's think about this for a moment.

Governor Sandoval's proposed budget is $5.8 billion (now raised to about $5.9 billion thanks to some new revenue forecasts). The additional $700 million would boost the general fund budget to about $6.6 billion or nearly $200 million more than the current general fund budget.

In other words, Jon Ralston wants Republicans to give away their biggest bargaining chip so that spending - despite a prolonged recession and 13 percent unemployment rate - increases between the 2009-11 and 2011-13 biennium.

Given the balance in the legislature, I've always thought that just maintaining spending levels would be a victory for Republicans. Thus, giving away their biggest bargaining chip at square one would be a stupid strategy. It would be especially stupid given the fact that Senate Majority Leader Steven Horsford and Assembly Speaker John Oceguera have made it no secret they believe the state has a $2.5 billion shortfall.

Do the math. $5.3 billion in projected revenue plus $2.5 billion in desired spending = $7.8 billion budget. That is about $$900 million more than our record setting 2007-09 biennium budget.

If Republicans automatically start the negotiations at $6.6 billion (more than we're spending now) what's to stop the Democrats from demanding more and more and more and more as the legislative session wears on?

The children's book, "If You Give a Mouse a Cookie" immediately springs to mind.

Republicans absolutely have to hold fast and refuse tax hikes in order to bring the Democrats currently unreasonable demands back down to reality. If Republicans give in now, Democrats will make further demands, including more tax hikes.

POLITICAL NOTE: Governor Jim Gibbons managed to get a flat budget out of the Nevada Democrats in 2009. If Governor Sandoval wants to best Jim Gibbons' record, he'll have to keep the budget below $6.4 billion - IE, get the Democrats to make real budget cuts.

Tuesday, April 26, 2011

Do unions still condone violence?

Andrew Breitbart has an interesting post with links to two videos regarding courses at the University of Missouri St. Louis and Kansas City campuses on union activism and violence. There is no denying that unions have a racist and violent past (unless you're a dogmatic ideologue who hates history). Today, unions have distanced themselves from past racist activities (they still dislike foreigners) but are they any less violent?

Breitbart links to two videos of the course but doesn't offer the full clips so the discussions may be out of context. A lot of the discussion we see between the students and professors revolves around condoning  violence (or potentially condoning...again we don't have the full video, just clips) if it leads to your end goal (in this case unionization, higher pay, more benefits or a full-blown workers revolution).

It's for you communism!

If they are condoning violence then I'm honestly not surprised. Marxism, communism are such fundamentally weak ideas that they can't convince people they're right so they have to kill, threaten or beat up the opposition. There are very few instances of communist societies arising peacefully and no examples of any long term success.


Union Thuggery 101

Union Thuggery 102

Monday, April 25, 2011

Nevada Politics: Boo hoo Dr. Dina Titus

Dr. Dina Titus 

The UNLV College Republicans continue to pour it on former congresswoman Dr. Dina Titus for taking a $107,000 salary for teaching one class. Of course she has more duties than just that. She does one, one hour radio show a week - with five whole episodes done. (Note, I've done twelve radio interviews this year ranging from 20 minutes to an 100  minutes in length and earned for $0 for my participation). She is also a board member of the Women's Research Institute and works with the Black Mountain Institute (literature and poetry) to set up seminars and panel discussions.

Whether those additional duties warrant that high of a salary is another story. I'm leaning toward no...

After expressing support for anti-free speech policies on the UNLV campus, Dr. Titus begins her counterattack on the UNLV College Republicans in the college newspaper, the Rebel Yell.

Dr. Titus writes,

But because The Rebel Yell continues to give them unwarranted attention, thereby perpetuating their false charges and untruths, I feel compelled to respond to the latest piece by Matthew Jarzen, Rebel Yell opinion columnist and former president of the College Republicans.

I'm sorry Dr. Titus, but BOO HOO! The UNLV College Republicans invited her multiple times to their club meetings to discuss the issue. She even agreed to attend, then pulled a no show with a last minute email. I know, I attended the meeting as a guest speaker to follow her presentation. You can't claim they're misleading Rebel Yell readers when you blatantly ignored them, including ignoring invitations to explain your side of the story. If they made any mistakes now, its you're own fault!

FULL DISCLOSURE: I'm not a Republican, nor did I receive a single penny for attending the UNLV College Republican meeting.

Mark Ciavola has made a meal of Dr. Dina Titus. His political future in Nevada looks bright.

Dr. Dina Titus made a political miscalculation. She thought she was dealing with just another group of silly students. Little did she know, she was dealing with Mark Ciavola, a returning adult student with a professional background (including in politics) who views college as more of a learning opportunity than a week long drinking bender. He's turned the UNLV College Republicans into a force to be reckoned with... Ciavola and his College Republican crew (this is a team effort after all) even seem to be outdoing the professionals working for the Nevada Republican Party.

Dr. Titus is right about one thing, she isn't an exceptional case - there are hundreds of highly paid professors and more than just Dr. Titus offer questionable value to students and to our body of knowledge through research.

Yes Mr. Greenspun, words have meanings: or, understanding Nevada's budget shortfall

Mr. Brian Greenspun is the editor and owner of the Las Vegas Sun, a newspaper that did a poor job predicting the state's current budget shortfall last year. They wrote that the shortfall was "half the size of the current budget" - not an entirely untrue statement given how dishonest the state calculated the budget shortfall in the first place. However, they assumed, incorrectly, that the state's general fund revenue would fall to around $3 billion because the Las Vegas Sun staff did their math backwards. Let me explain.

The state's budget shortfall was calculated by taking the CURRENT BUDGET adding in INFLATION, POPULATION GROWTH, PAY RAISES FOR EMPLOYEES and other ROLL UP COSTS and then subtracting this sum by the projected revenue. State officials calculated they would need $8.3 billion (A RECORD SETTING BUDGET) in order to "sustain" current services. In other words, state officials wanted a 29.6 percent increase in spending in order to "sustain" services.

The Sun, like so many others, were tricked into believing the budget calculations were current budget minus projected revenues. This is why the Sun assumed future revenues would be down around $3 billion, thus requiring a "50 percent budget cut" (YES THE SUN REALLY CLAIMED THIS!)

The Sun should have known better, especially after I contacted multiple reporters to explain how the calculations were being done. To be fair, even the Review Journal, Reno Gazette Journal and Nevada Appeal reporters were equally confused - just not for as long and without as many embarrassingly bad predictions.

In fact one reporter told me that they did understand the budget calculation issue, but that since they've been doing it the old way for so long, it would take up too much time to explain to their readers. (GREAT JOB FOURTH ESTATE!)

Anyway....the Las Vegas Sun continues to mess up on the budget issues. This time Sun editor Brian Greenspun once again demonstrates his ignorance on budget definitions (it could be an honest mistake, but he's done this more than once).

Let me explain.

Deficit - spending more money than you take in revenue. Nevada cannot do this, our constitution does not allow it. We aren't even doing it now.

Shortfall - the difference between desired spending (or current spending if you're intellectually honest) and future revenues. This is the current issue. We have a budget shortfall, not a deficit.

Republicans claim the shortfall is somewhere around $1 billion to $1.5 billion. This is the difference between current spending and future revenues. Brian Sandoval's plan is a combination of budget cuts and fund sweeps that will ultimately cut $600 million from current spending, i.e. drop spending from $6.4 billion to $5.8 billion.

Democrats and the Las Vegas Sun claim the budget shortfall is over $2 billion. This is simply the difference in how much they want to spend ($7.3 billion to $7.8 billion - record setting amounts) and future revenues. In other words, Democrats want to raise spending from $6.4 billion to over $7.3 billion (at least rhetorically. They know this would be impossible so they're really shooting for $6.4 billion to $6.8 billion so they can appear as if they compromised and cut the budget when in fact they cut squat).

I swear, we've cut to the bone, there is no more fat to cut!

Before I (and a few others) helped blow the whistle on the dubious accounting measures used to calculate the shortfall, everyone in Nevada assumed the budget shortfall would be over $3 billion - ie the state wanted to spend over $8 billion (a record setting amount). Happily this ridiculous $3 billion shortfall figure is no longer present in any discussion - even Democrats have distanced themselves from that bogus figure.

Thursday, April 21, 2011

Support this tax increase and we will tax you again

If they could, they'd tax your ass

Senate Majority Leader Steven Horsford (D-Las Vegas) has a bill, SB 372 that was recently heard in the Senate Finance Committee. SB 372 will add a minimum of $221 million to the state's budget shortfall if passed. Senator Horsford claims his bill protects the will of the people and about $221 million in room tax increases from the 2009 voter initiative that was meant for teacher pay raises starting in 2011.

SB 372 would also prevent Governor Sandoval from sweeping the $221 million away from teacher pay raises to deposit those funds in the state general fund for appropriation back to K-12 education. Yes, he's taking money from K-12 only to give it back, but there is an important distinction.

Basically, if Governor Sandoval didn't sweep the promised room tax funds, teachers (who kept their job) would see a large boost in incomes while the K-12 school districts had to simultaneously cut spending in other areas; including laying off younger teachers. It makes no sense to have a pay increase in the middle of a prolonged recession. In fact, it makes far more sense to have a pay freeze (at least) and deposit those room tax funds in the general fund so it can be used in a multitude of other ways - like preventing or reducing teacher layoffs.

The bulk of the additional room tax revenue comes from Las Vegas. That also means lower sales and fewer hours for local workers as the government, rather than tourists, spend that money.

That said, Horsford still believes he's following the will of the people. After all, voters approved the room tax hike in 2009.  Back then the people were told that we had to raise taxes or significantly reduce the budget. The room tax increase would support the state's general fund for FY 2010 and FY 2011 before being sent to K-12 Education starting in FY 2012 to fund teacher pay increases. The caveat, of course, was that MOST EVERYONE believed the recession would be over by FY 2012. With 13 percent unemployment and FY 2012 less than 3 months away, no one believe the recession is over in the Silver State.

Think about it this way. How many Nevadans would support the 2009 room tax hike if the supporters accurately predicted the future? "We'll raise the room tax to supplement the reductions in general fund revenue because of the recession and in 2011 we will take that money and spend it on teacher pay raises and increase taxes yet again to supplement the reductions in general fund revenue because of the recession."

I.E. support this tax increase and we'll tax you again.

Senator Horsford isn't following the laws true intended purpose. The intended purpose was to bolster general fund tax revenue that declined because of a recession. Teacher pay increases in 2011 were a side-note (and a gimmick) because people thought the recession would be over by then. Governor Sandoval's plan follows the spirit of the law - he wants to continue to use those taxes to supplement the general fund revenue which continues to fall because of a prolonged recession.

There is also one final question that remains about SB 372. The law states that the room tax increase must be a supplement to, not a replacement of, K-12 education funds. This means you can't cut $221 million from education and then fill that cut back in with the $221 million room tax. In other words, if Senator Horsford wants to protect that $221 million room tax for K-12 do we also have to find another $221 million for K-12 education? If so, SB 372 eliminates any cuts to K-12 education and keeps the state's spending bender going for another biennium. Of course, Senator Horsford would have to pass significant tax increases...yet again.

Note: SB 372 allows for a few alternative uses for the room tax funds, but not all would be effective uses of scarce resources (like Head Start).

Tuesday, April 19, 2011

Nevada Association of School Boards...logically inconsistent

Like Luke destroying the Death Star, education reformers are torpedoing the bureaucratic self-interested education monopoly Empire with logic and facts.

Last week I testified in favor of SJR10 which would repeal any constitutional prohibition against publicly funded tuition scholarships to attend private schools (also known as vouchers). Vouchers are already constitutional in Nevada, but that is another story.

This morning I was reviewing the testimony and exhibits of Dr. Dotty Merrill from the Nevada Association of School Boards. She opposes school vouchers because private schools can reject students. Ironically, ALL Nevada public schools can (and do) reject students. So I wrote a letter to Dr. Merrill to see if she could clarify the logical inconsistency between her objection to vouchers and current public school policies.

Dr. Merrill,

I was reading over your testimony and exhibits regarding SRJ10 on school vouchers. I noticed some of your claims to reject school vouchers were inconsistent with current public school policy. I am hoping you will comment to clarify the Nevada Association of School Board's position on these matters.

You claimed that private school can reject voucher students and that this would be unfair to students and tax payers alike.

If this is a problem does the Nevada Association of School Boards supporting eliminating the ability of public schools to use admissions and enrollment criteria?

  • How about the elimination of the Davidson Academy - a public school for gifted students where students must score on the 99.9th percentile on one of several exams for admissions? Do you oppose using aptitude tests and IQ tests as admissions requirements for publicly funded schools?  

  • Do you also support the elimination of suspension and expulsion rights for public schools? As you claimed, public education has to educate every child, even the ones who misbehave. It would seem suspending and expelling students is inconsistent with that claim - especially if you are using this issue as a way to oppose tuition scholarship programs.

Each of these policies, which you have asserted are grounds for rejecting public tuition scholarship (vouchers) for private schools, are practiced by public school. Thus, your public testimony regarding SJR10 last week is entirely inconsistent with what is occurring with your own public schools. Could you please clarify?

I also noticed your testimony included cherry-picked reports regarding the efficacy of vouchers. One of your exhibits claimed there was little to no evidence that vouchers improve student achievement. Could you please comment on the 9 random assignment studies (the gold standard for scientific research) that find school vouchers improve student achievement or graduation rates? Please note there have only been 10 random assignment studies. You can find a detailed reference here.

Could you please clarify these issues? I appreciate your help.

I look forward to reading her response...

Monday, April 18, 2011

How can you say education doesn't matter?

On Saturday I testified before the Assembly Ways and Means Committee in favor of AB555. This bill would eliminate teacher seniority (last hired first fired policy), eliminate tenure (teachers would be hired on one year contracts), eliminate longevity bonuses (bonuses for reaching certain milestones in ones careers but not eliminate the lock-step pay) and eliminate the advanced degree bonus (for new hires only).

The teacher union, of course, was opposed to everything. One of the biggest sticking points, however, was the claim that earning an advanced degree was not correlated with greater student achievement.

The reaction in the room was just like this

The problem isn't that people are earning advanced degrees. Learning for its own sake is great. The problem is that school districts in Nevada (and abroad) offer substantial bonuses for additional education. In the Clark County School District, the difference between a first year teacher with a bachelors degree and a first year teacher with a masters degree is $5,655, or 16 percent. The difference between a first year BA and first year PhD is $11,435 or 25 percent. The difference between a teacher with a BA degree who has topped out of the salary schedule and a PhD who reached the top of the salary schedule is $27,430! That is a whopping 40 percent difference in pay for no statistical difference in outcome!

CCSD Teacher Salary Schedule for FY 2011 

Despite these substantial pay increases, the research continues to show these advanced degrees do not result in additional student achievement.

This revelation seems to have set off a nuclear meltdown in the Assembly meeting - teachers and elected officials alike were horrified.

Assemblywoman April Mastroluca angrily fired back "how can you say education doesn't matter?" Of course, that isn't at all what I said at all. I stated that "advanced degrees are not correlated with greater student achievement" that is, when comparing outcomes between teachers with BA and advanced degrees, there is no statistical difference in student achievement.

Assemblywoman Debbie Smith asked the same exact question, just in a more polite tone.

I have to admit I was a bit confused as to how they could be reaching the conclusion that I was stating education doesn't matter. It made no sense.

Then I realized something!

All of these people (the teachers the members of the committee) were assuming  that being educated (assuming you did in fact gain knowledge along with a piece of paper) means you know how to impart that knowledge on to others; i.e. you know how to teach.

This is exactly what the research is addressing. Does earning advanced degrees make you a better teacher? The answer is no. The reason why? Not all teachers are even good at teaching in the first place.

I can't blame teachers and politicians for protecting the status quo. Teachers get a substantial bonus and they paid a lot of money to earn those degrees. I understand why they want to preserve the system; it is self interest - a natural human tendency. My favorite quote from a teacher highlights this self-interest: "I'm not in it for the money, but I expect to be paid extra for my education." Yes, I'm not in it for the money BUT!

(My second favorite line from a teacher in opposition was "research can be used to prove anything!" My response is, "OK, so where is the research to prove your position?")

The problem is that the teachers self-interest, in this case, does not line up with the interests of the student.

We should not pay teachers extra because they got additional education. We should pay extra if that additional education produces greater student achievement. That said, I'm disappointed that the Sandoval administration is going after the low-hanging fruit of just ending advanced degree pay for new teachers. I understand why, it cuts down on the opposition of the entrenched special interest groups that want to protect their own salaries. But advanced degree bonuses is an expensive, wasteful and ineffective policy.

Paying teachers extra for advanced degrees has the same effect for student achievement

The fairest policy, especially if the goal of education is educating children rather than providing jobs to adults, is to eliminate the advanced degree bonus for everyone.

Nevada has 15,000 teachers with advanced degrees. Based on the minimum CCSD salary boost of $5,655, that is an additional $84.8 million a year spent on bonuses that have nothing to do with student achievement. We could A) eliminate that bonus all together, do no harm to the students, and save the state $169.7 million over the biennium or B) eliminate that bonus all together, do no harm to the students, and then spend that money on programs that work... possibly benefiting students.

In fact both of these suggestions are supported by Dr. Paul Peterson, a professor at Harvard University.

Explore some of the research yourself:

Chingos, Mathew and Paul Peterson. 2010. "It's easier to pick up a good teacher than to train one"  Paper prepared for A Symposium sponsored by the Economics of Education Review.

Goldhaber, Dan. 2002.  “The Mystery of Good Teaching.”  Education Next 2 (2): 50–55

Hanushek et. al. 2006. "Teacher Quality"  Handbook of the Economics of Education. Amsterdam: Elsevier.

Harris, Douglas N. and Tim R. Sass. 2008. “Teacher Training, Teacher Quality and Student Achievement.” Department of Economics, Florida State University

Rivkin, Steven G., Eric A. Hanushek, and John F. Kain. 2005. “Teachers, Schools, and
Academic Achievement
.” Econometrica 73: 417–458

Patrick McGuinn, 2010. "Ringing the Bell for Teacher Tenure Reform"  Center for American Progress.

Gordon, Robert., Thomas J. Kaine, and Douglas O' Staiger, 2006. "Identifying Effective Teachers Using Performance on the Job" Brookings Institution.

Friday, April 15, 2011

Debunking meaningless statistics about higher education spending

A few months back Dr. Elliot Parker, a University of Nevada Reno economics professor penned an article in the Nevada Appeal arguing that his university can't stand another budget cut. One of the statistics he sites is "state general fund spending on higher education as a percentage of Gross State Product" (GSP). He finds that Nevada System of Higher Education's general fund appropriation is a mere 0.6 percent of GSP.

I meant to write an article at the time to correct some of Dr. Parker's gross exaggerations about the magnitude of the budget cut and point out his GSP statistic is meaningless. Now Dr. Parker's column is popping back up on Facebook and on the Save Our Schools blog.

Now it's time to dispatch this meaningless statistic once and for all.

First, we must know what "General Fund appropriations to NSHE as a percentage of Gross State Product" really means. This is simply the state general fund spending on higher education as a percentage of the state's overall economy. Lets break this statistic down piece by piece.

GENERAL FUND appropriations are a portion, less than 1/3rd, of all revenues for the Nevada System of Higher Education. 

 Source: Regent Ron Knecht. Data comes from NSHE budgets.

  • Dr. Parker and many other university officials pretend that the other 2/3rds of revenue are tied down  and can't be used for anything but their intended purpose. This is not entirely true, in fact, wisely using the resources from the other 2/3rds means you don't have to spend from the general fund to support them.
  • Think about this for a moment. Parker et. al. complain that if you cut from 1/3rd of the budget they won't be able to fund the other parts of the budget either. In other words, they're divorcing 2/3rds of the budget when it is to their advantage, but include the other 2/3rds if they can make it sound like the budget cuts will harm those programs too. Pure information manipulation.

Ok, now we know they artificially lower the amount of spending by ignoring a very large chunk of revenues and expenditures. What else is wrong with this statistic?

Well, what is Gross State Product?

  • Gross State Product is basically the state's version of Gross Domestic Product. It is simply the market value of all final goods and services produced within a state. High GDP or GSP means there is lots of wealth within a country or state. Dividing GDP or GSP by the population tells us the wealth per person. It is an imperfect, but best available, statistic for measuring wealth.
  • Taking X as a percentage of GSP does not tell us the expenditure per person using the service, it is simply the expenditure as a percentage of the overall economy.
  • So if you're a really wealthy state and spend even an average amount on a government service you may have spent a lower percentage of GSP on that service than a poorer state. It does not mean you underfund that service.
For example:

State 1: GSP of $1000 with 100 citizens of which 10 are students ($10 GSP per capita). State 1 spends $100 on higher education ($10 per pupil) or 10 percent of GSP.

State 2: GSP of $500 with 100 citizens of which 10 are students ($5 GSP per capita). State 2 spends $90 on higher education ($9 per pupil) or 18 percent of GSP.

Not only is State 1 wealthier per-capita, it spends more on higher education overall!  State 1 also spends more per-pupil on higher education than State 2. However State 1 spends less as a percentage of GSP. In this example, Dr. Parker would want you to focus on the latter statistic and conclude that State 1 underfunds higher education.

In reality, State 1 is the better state to live in. Not only are they wealthier per-person, their system of higher education appears to be far more efficient and productive. In fact, you want low spending as a percentage of GDP/GSP and high incomes; that is the best possible result because you have lots of extra wealth to now spend on other things.

If we could also prove that Nevada is a wealthy state, Dr. Parker's statistic would be rendered more meaningless, especially since he's been trying to prove Nevada underfunds higher education

Dr. Parker's GSP statistic also doesn't tell us who uses higher education. What if few people need higher education or few people use it? Spreading out the expense of higher education for a few people against the wealth of everyone doesn't make any sense unless you're an elitist who simply wants a bigger cut of the pie (Dr. Parker does work at a school that is mostly white upper-middle class with very few poor students and an under-representation of minorities).
  • Few people in Nevada attend or graduate from college. This is may seem strange since Nevada has a high income per-capita and a low poverty rate. This tells us that higher education isn't very useful in Nevada for getting ahead in life. In other words we can expect spending to be low as a percentage of the overall economy.

 Dunce or Deceiver? You decide.

Let's put this all together.

  • Dr. Parker has ignored 2/3rds of revenue and expenditures so he's artificially lowered the amount under examination
  • Nevada is a wealthy state, so we've got a relatively high GSP to compare with an artificially lowered spending figure
  • Few people in Nevada need or use higher education so of course spending will be low as a percentage of the overall economy.
  • None of this  tells us about spending per-pupil - the most useful metric for determining how much you spend per person actually using the service.

I don't think Dr. Parker is a stupid man, so did he purposefully select a data figure that he knew would produce a low outcome in order to deceive us? Even putting aside looking ONLY at general fund appropriations was he simply ignorant that few people in Nevada attend college in our above average wealthy state?

Given the facts above, there is no denying that looking at general fund spending on higher education as a percentage of GSP is a pretty useless statistic in determining whether or not Nevada underfunds higher education.

Let's look at a more useful spending figure. How about the amount of money spent on education and research per student? In this way we're ignoring all non-education and non-research spending like debt repayment and capital expenditures. That sounds fair doesn't it? Well how does Nevada rank then?

Click on the graph above to get a better view. You will notice that Nevada's spending on education and research PER STUDENT ranks our state 15th highest in the nation! Yes this statistic is from 2006, but 1) all states are cutting from higher education and there is no new statistic to make this comparison and 2) Nevada increased spending through the start of the recession up to 2009. In fact, we are likely still spending as much or more than in 2006 a boom year for Nevada.

Source: NSHE Regent Ron Knecht. I have excluded capital projects.

The problem is not that Nevada underfunds higher education. The problem is that higher education is bloated, wasteful, ineffective and inefficient.

Wednesday, April 13, 2011

Testimony on SJR10

I testified as a witness for Senator Michael Roberson in favor of SRJ10 on April 12. SRJ10 is a bill to remove Nevada's "Blaine Amendment" (in relation to education) from the state constitution. This would eventually allow a school voucher or tuition-tax credit program to be passed without legal challenge from the ACLU or teacher union but the process would take 4 to 6 years to complete. I argue that school choice is already constitutional in Nevada and we should go ahead and pass a voucher or tax-credit bill today (the ACLU and teacher union will sue to stop a constitutional amendment anyway).

My official testimony is below:

My name is Patrick Gibbons and I am an independent researcher and consultant with a focus on education. I’m here in support of SJR10 and the concept of parental choice through opportunity scholarships, otherwise known as school vouchers.

The right to a good school and a good education should not be determined by a child’s zip code. A zip code can often be a good indicator of how affluent your neighborhood may be. The result has been not only segregation by income but segregation by race. For true equity, parents must be given the right to choose where to send their child to school.

The best way to achieve this is through opportunity scholarships; called school vouchers here, but may also be tuition-tax credits or education savings accounts in other states. The idea is simple – public education is about the public helping children get the best education possible; wherever that might be.

Today, there is a growing consensus among education researchers that vouchers have a positive impact on students. Nine out of 10 random assignment studies, the gold standard of scientific research, show statistically significant benefits for students (and note, these programs are serving mostly inner-city, low-income minority students). One study showed no difference with traditional public schools, and no random-assignment study shows students are harmed.

Even the study on the DC Opportunity Scholarship Program, which gave low-income parents $7,500 to pay for private school tuition, saw a massive 21 point gain in graduation rates among participants. 21 points! Imagine how effective that would be against Nevada’s, last in the nation graduation rate!
Critics contend that parental choice will hurt public schools, yet 18 out of 19 studies on the systemic effects of vouchers done in the last ten years show that public schools improve when faced with competition from private schools. David Figlio, a professor at Northwestern University, found that in Florida competition from private schools had the biggest positive impact on public schools with a large population of low-income students.

Critics also claim that scholarships don’t cover the full amount of tuition. An ACLU representative expressed this last year – though they didn’t bother to voice their opposition to food stamps, which doesn’t cover the full cost of food, or housing assistance, which doesn’t cover the full cost of housing. Nevertheless, this opposition ignores key facts about private schooling.

First, according to the U.S. Department of Education, just 1/3rd of private schools charged tuitions exceeding $10,000 a year. In fact, I’ve found several private schools in Nevada that charge tuitions lower than $6,000 – a fraction of what Nevada public schools spend. Finally, even elite-private schools accept students despite low scholarship amounts. This was made clear when Sidwell Friends, the elite private school that educates President Obama’s daughters and charges over $28,000 a year in tuition, accepted a student with a DC Opportunity Scholarship of just $7,500.

In regards to the constitutionality of parental choice and opportunity scholarships in Nevada there are differing opinions. SJR10 attempts to make the constitutional objections a moot point; however this may be overly cautious on the part of the bill’s sponsors.

The constitutional objection stems from Nevada’s Blaine Amendment – a constitutional prohibition that was added during a wave of anti-Catholic and anti-immigrant sentiment that swept the nation in the 19th century. This was a time when public schooling was for white Anglo-Saxon Protestants while many Catholics, Chinese, African Americans and Native Americans could not even get a high school education in many parts of the country.

Despite this, the Institute for Justice – a civil rights law firm which successfully defended Arizona’s school choice programs before the U.S. Supreme Court – believes vouchers and tuition-tax credits will be constitutional in Nevada. Choice scholarships award parents, not schools, the money. Parents are free to pick any school they choose, thus neither vouchers or tuition tax-credits are in violation of Nevada’s constitution.

Two recent Supreme Court cases (Zelman v. Simmons-Harris, 2002) and (Arizona Christian School Tuition Organization v. Winn, 2011) validate this opinion. For these reasons, and because changing the constitution could take upwards of six years, I believe Nevada should pass school choice bills regardless of constitutional amendments. Not only will organizations like the Institute for Justice happily battle the ACLU in court again, but students can not afford to wait the four to six years it will take to amend the state constitution.
Personally, I think we should go with a combined personal tax-credit and corporate tuition tax credit program. Individuals can get tax credits for their own education expenses or donations they make to scholarship tuition organizations (STO) which provides scholarships to low-income children. Corporations could also get a tax-credit on donations they make to STOs. In this way we also provide opportunity scholarships for low-income families so they can afford private school tuition as well.

Tuition tax-credits have a distinct advantage over vouchers in terms of winning in court (I still think vouchers are constitutional but a tuition tax-credit program would be very, very, very difficult for the ACLU and teacher union to overturn in court). Tuition tax-credits may also have the advantage of helping control education costs in the long run and may reduce the likelihood of governments hampering private schools with more and more burdensome regulations.

Monday, April 11, 2011

SB 2 - spend more money... because

Today I testified on three education bills in the Nevada Senate Finance Committee. While one was an intriguing option (65 percent solution) none of the bills were groundbreaking. In fact, two bills were dedicated entirely to spending more money. In this blog post I'll talk about SB2 and will get to the other bills later.

SB 2 - Increase Per-Pupil Spending to the National Average

Senator Schneider has brought this bill before the legislature every biennium for as long as he's been serving. The bill merely aims to increase spending to the national average... as if that is some magical threshold that will boost achievement. According to Senator Schneider we would need to spend roughly $1.6 billion extra in this biennium to reach the national average.

(The teacher unions, school districts and administrative unions have supported this bill, so for now we should assume that approximately $10,500 per pupil is the magic number where student achievement soars. At our past pace we will reach this figure before 2020 (yes, adjusting for inflation so that is $10,500 in today's dollars). Also note: no one demanding more spending ever says how much will be enough. More is the only answer we hear).

The latest figures from the National Center for Education Statistics put Nevada between $8,301 and $9,015 per pupil. Senator Schneider wants an additional $1,966 per pupil. Unfortunately, there is no correlation between spending and student achievement.

I've done dozens of these charts and regressions based on NCES and NAEP data. You can read more about these regressions at this blog post where I dismantle the notion that more spending leads to greater results.

All testimony in favor of this bill focuses on the input of dollars rather than the output of student achievement. Evidence from these individuals was anecdotal and very scant. In fact, as I (and many other people) have shown, there is no correlation between student achievement and spending - especially after you control for differences in income, English language learning status and special education.

Senator Schneider also argued that all good schools spend lots of money. "Just look at private schools" he said pointing to several elite private schools in Las Vegas. However, according to U.S. Department of Education data, less than 1/3rd of all private schools charge tuitions exceeding $10,000 (just below the national average for public school expenditures which also excludes spending on capital and debt repayment). You will also note that the average tuition charged at a private school is $400 less than the average "current spending" at a public school.

Senate Majority Leader Steven Horsford points out that K-12 education budgets have been cut since the recession began, thus our spending must be even lower than the 2007-08 predictions and thus even lower than the national average. I've pointed out in the past that no, this is not likely the case. In Nevada, K-12 education hasn't seen much of a budget cut since the recession began.

*These figures come from the Clark County School District's published budgets and are available online. 75 percent of all students in Nevada and 75 percent of all dollars spent on K-12 education is in CCSD. You'll note that even after the budget cuts and adjusting for inflation CCSD's operating expenditures per-pupil declined about 1 percent. In other words, the NCES estimates from 2007-08 are likely to be accurate for today.

Senator Horsford worried that globalization is leading students in nations like India and China to compete with students in Nevada (note: the global supply of jobs is note finite). Thus, Horsford reasoned that we must increase spending in order to compete in a globalized world.

Depending on how you count the students (fall enrollment or daily average) Nevada's spending in 2006-07 was between $8,200 and $8,800. The chart above is adjusted for purchasing power parity which adjusts for cost of living differences and dollar valuations between nations. The PPP iss adjusted to American dollar value.

However, if Nevada were its own nation, our per pupil spending would rank about 10th among the OECD...perhaps ahead of Iceland and way ahead of France and Germany. Check the OECD statistics, Chart PF1.2.B on page 2,  yourself. Note: the OECD members are 34 of the world's wealthiest and most developed nations.

After all this evidence there is really only one conclusion to make - spending more money is unlikely to boost student achievement in Nevada. The fact is, it is not how much you spend but how effectively you spend the resources you already have. In other words we need serious education reform. I urge Nevada Democrats to read Whitney Tillson's presentation "A Right Denied" for Democrats for Education Reform on what is wrong with public education and how we can reform public education to benefit students.

Monday, April 4, 2011

No clue

Colonel Mustard says "Get a clue and know your audience before you hang yourself"

Even after the chancellor of the Nevada System of Higher Education (NSHE) apologized for past hyperbole on budget cuts, University of Nevada - Las Vegas (UNLV) President Neal Smatreks continues to prove he really has no clue (I blame it on him being a Longhorn).

On Thursday March 31st, Smatresk presented yet another "doom and gloom" scenario of what would happen if his university faced further budget cuts. But this time the presentation was to executives of Nevada's casino industry.

According to Dave Berns one casino exec said “You can’t argue gloom and doom. People don’t want to hear it right now, not when hundreds of thousands remain out of work or have had their hours cut.”

This casino exec is right in more ways than one. Let me explain why in further detail.

Looking at NSHE spending figures I've obtained from Regent Ron Knecht, I see that NSHE collected $1.659 billion in revenue in 2008 (less special projects and capital projects) and $1.609 billion in revenue in 2011. After adjusting for inflation the decline was a mere $96 million or 5.9 percent of total annual revenue.

For UNLV the decline less severe with revenues falling $20 million or 3.7 percent between 2008 and 2011 (capital improvement plan excluded). That may seem like a lot but UNLV seems no worse off than they were in 2006 or 2007...ah the good old days.
 *Excludes capital project and special project revenues

Looking at the gaming revenues from the Casinos from year to year you can see that gaming wins declined 8.4 percent between June 2008 and March 2011. That is higher than NSHE and UNLV! But the situation gets even worse when you realize gaming took their biggest hit between 2007 and 2008.

*Source: Nevada Gaming and Control Board: year to date estimates are from June in previous year to March of current  year (allowing most recent available to be compared with past year-to-date data).

Going back to the 2007 data we see gaming revenues have dropped 20.9 percent. But now what about NSHE and UNLV?  NSHE's inflation adjusted revenue drop was 1.1 percent between 2007 and 2011 while UNLV saw revenues fall 0.2 percent between 2007 and 2011.

In other words, casino executives are not a sympathetic audience to caterwaul about "devastating" revenue declines, especially since NSHE and UNLV didn't take any real revenue declines until 2009-10 when everyone was already well into the recession. While NSHE officials were busy complaining and overstating budget cuts, Casino exec were busy trying to keep their business afloat, people employed, and customers happy with less money than in years before.

Ultimately, UNLV and NSHE have demonstrated more complaining than innovating and people, not just casino execs, are getting tired of hearing about it. 

I admit this is an apples to oranges comparison because casinos have other sources of revenues such as sales, food and live entertainment, but I'm willing to bet that even after including these other revenues they have still seen a larger drop in revenues than Nevada's universities.

Sunday, April 3, 2011

Turbo Tax Rap

I'm doing taxes, with Turbo Tax, so I thought I'd share the Turbo Tax Rap with you...