Between 1989-90 and 2005-06, differences between states accounted for a greater proportion of the variation in instruction expenditures per student among unified public elementary and secondary school districts than did differences within states.

A number of methods can be used to measure the variation in the amount school districts spend per student on instruction. This indicator uses the Theil coefficient to measure the variation in the instruction expenditures per student in unified public school districts for prekindergarten through grade 12. The Theil coefficient provides a national measure of differences in instruction expenditures per student that can be decomposed into separate components to measure school district-level variations both between and within states. The between-state and within-state components indicate whether the national variation in instruction expenditures per student is primarily due to differences in expenditures across states or within states. Similarly, the trends in the two components indicate whether the change over time in the national variation of expenditures per student is primarily due to changes between states or within states. The Theil coefficient can range from zero, indicating no variation, to a maximum possible value of 1.0.

Across U.S. districts, the total variation in instruction expenditures per student decreased between school years 1989-90 and 1997-98 (see table A-35-1). While both the between-state and within-state variations also declined, the percentage of the total variation due to between-state differences was higher in 1997-98 (74 percent) than in 1989-90 (72 percent). From 1997-98 through 2005-06, the total variation in instruction expenditures per student increased each year, and in 2005-06, it was greater than it was in the early 1990s. As with the case for total variation, when variations due to between- and within-state differences are considered separately, both components showed increases from 1997-98 through 2005-06. As the increase in the between-state variation in instruction expenditures per student from 1997-98 through 2005-06 was larger than its decrease from 1989-90 through 1997-98, the between-state variation was greater in 2005-06 than it was in the early 1990s. The increase in the within-state variation from 1997-98 through 2005-06, however, was smaller than its decrease from 1989-90 through 1997-98, so the within-state variation was smaller in 2005-06 than it was in the early 1990s. From 1997-98 through 2005-06, the percentage of the total variation due to between-state differences increased from 74 to 78 percent and that due to within-state differences decreased from 26 to 22 percent.

The variation in instruction expenditures per student over time may reflect differences across school districts in the amount of services or goods purchased, such as the number of classroom teachers hired. These changes may, in part, reflect various state finance litigation, school finance reform efforts, and changes in the composition of student enrollment. Further, some of the variation in expenditures per pupil may be due to cost differences across both states and districts within states. Changes in cost differences across and within states may also affect the changes in the variation over time.

Technical Notes

For more information about classifications of expenditures for elementary and secondary education and about the variation in expenditures per student and the Theil coefficient, see supplemental note 10. Unified public elementary and secondary districts are those districts that serve both elementary and secondary grades. The Theil coefficient was calculated for unified districts only to limit any variations in expenditures per pupil due to the grade levels of the school districts. In 2005-06, approximately 91 percent of all public elementary and secondary school students were enrolled in unified school districts. For more information about the Common Core of Data (CCD), see supplemental note 3.