A Method for Predicting the Effects of Different Forms of Outside Aid on Local Educational Expenditure.

by Edgar O. Olsen

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State and federal governments can provide aid to local school districts in many different forms, which, in general, will have different effects on school district spending; policymakers, therefore, need to know what the impacts of alternative aid programs will be in order to best achieve their objectives. This report presents a method, based on a simple empirical model, for predicting the effect of outside aid on the educational expenditures of school districts. Unlike earlier studies, it attempts to estimate the preference function that underlies school district behavior, thereby making it possible to predict impacts of all types of aid, including types that have not been used in the past. 54 pp.

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