Measuring equity and adequacy in school finance

INTRODUCTION Over the past 45 years, researchers have devoted significant effort to developing ways to measure two important goals of state school finance systems: the promotion of equity and, more recently, the provision of adequacy. Equity, as the term is traditionally used in the school finance literature, is a relative concept that is based on comparisons of inputs (oft en aggregated into a per-pupil spending measure across school districts). 1 Th us, an equitable finance system is one that reduces to a “reasonable level” the disparity in perpupil spending across a state’s districts. Adequacy of funding, in contrast, is an absolute concept that requires that spending reach a minimum threshold that provides sufficient spending to give students in each district an opportunity to meet state standards of performance. Th us, adequacy focuses only on the bottom part of the distribution of spending, with no attention to variations above the threshold needed for adequacy. Although general definitions are straightforward, quantifying measures of either the equity or the adequacy of a school finance system is a challenge.