The Measurement of Equity in School Finance with an Expenditure Disparity Measure. Papers in Education Finance No. 19.

This report evaluates alternative approaches to and measures of equity in state school finance plans. It also evaluates the Federal Expenditure Disparity Measure (FEDM). Following an introduction, Part II describes alternative conceptions of equity in education and identifies three components of these conceptions: groups treated, alternative treatments, and criteria for equity. Part III presents numerical models that show how alternative combinations of group, treatment, and criterion can yield different conclusions when applied to a hypothetical school district. In Part IV, the value judgments that underly the alternative conceptions of equity are examined. Since few value judgments are widely held, a number of equity conceptions must be considered valid. Also in Part IV, the value judgments inherent in Per Pupil Expenditure Disparity Measures (PPEDMs) are reviewed and analyzed. In Part V, the theory behind the FEDM and the way the Office of Education applies the FEDM to calculate measures from state data are discussed. In Part VI, recommendations concerning equity measurement in federal regulations and particular procedures used by the Office of Education to measure expenditure disparities are presented. A lengthy appendix considers social welfare theory, social choice theory, equity measures calculations, and the tax price of education. (Author/JM)