out error but that the errors in estimating the number of eligibles and the cost per eligible are negatively correlated. The aid distributed might then be relatively close to the desired distribution. Reducing the error in estimating the number of eligibles while making no improvement in estimating the cost per eligible could result in an aid distribution that lines up less well with the desired distribution.

Changes in the aid distribution resulting from proposed improvements in the measurement of one or more components should be evaluated. Evaluations should include a study of how the relations between formula outputs (allocations) and inputs (measures of need, fiscal capacity, and effort) are affected by the change, taking into account the effects of hold-harmless provisions and other special features of the allocation process.



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