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Projections of Education Statistics to 2011
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Table A5.1.-Equations for current expenditures per pupil in fall enrollment, estimated average annual salaries of teachers, and education revenue receipts from state sources
Dependent Variable Equation R2 Durbin-Watson statistic1 Estimation technique2 Rho Time period
Current expenditures per pupil   ln(CUREXP) = - 3.39 + 0.669ln(PCI) + 0.340ln(SGRANT) 0.993 1.70 AR1 0.69 1967-68 to
      (-4.11)   (3.29)   (2.41)       (4.76) 1998-99
    - 0.330ln(ENRPOP)
(-1.82)
                 
Estimated average annual salaries   ln(SALRY) =   11.4 + 0.41ln(CUREXP) + 0.54ln(ENRPOP) 0.949 1.44 AR1 0.85 1969-70 to
      (12.0)   (5.12)   (3.41)       (7.88) 1998-99
    + 1.72ln(ENR1/ENR2)
(3.39)
                 
Education revenue receipts from state sources per capita ln(SGRNT) =   5.1 + 0.61ln(PERTAX1) + 0.35ln(ENRPOP) 0.978 1.89 AR1 0.53 1967-68 to
      (4.62)   (12.9)   (2.27)       (2.93) 1998-99
    - 0.032ln(RCPIANN/RCPIANN1)
(-2.18)
                 

1For an explanation of the Durbin-Watson statistic, see J. Johnston, Econometric Methods, New York: McGraw-Hill, 1972, pages 251-252.
2AR1 indicates an estimation procedure for correcting the problem of first-order autocorrelation. For a general discussion of the problem of autocorrelation, and the method used to forecast in the presence of autocorrelation, see G. Judge, W. Hill, R. Griffiths, H. Lutkepohl, and T. Lee, The Theory and Practice of Econometrics, New York: John Wiley and Sons, 1985, pages 315- 318.
Where:
CUREXP = Current expenditures of public elementary and secondary schools per pupil in fall enrollment in constant 1982-84 dollars
SALRY = Average annual salary of teachers in public elementary and secondary schools in constant 1982-84 dollars
SGRNT = Local governments' education revenue receipts from state sources, per capita, in constant 1982-84 dollars
PCI = Disposable income per capita in constant 1996 dollars
ENRPOP = Ratio of fall enrollment to the population
PERTAX1 = Personal taxes and nontax receipts to state and local governments, per capita, in constant 1982-84 dollars lagged one period
RCPIANN = Inflation rate measured by the Consumer Price Index
RCPIANN1 = Inflation rate measured by the Consumer Price Index lagged 1 period ENR1 = Fall enrollment lagged 1 period ENR2 = Fall enrollment lagged 2 periods

NOTE: R2 indicates the coefficient of determination. Numbers in parentheses are t-statistics.
SOURCE: U.S. Department of Education, National Center for Education Statistics, Elementary and Secondary School Current Expenditures Model; Elementary and Secondary Teacher Salary Model; and Revenue Receipts from State Sources Model. (This table was prepared June 2001.)

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