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Statistical Issues in Allocating Funds by Formula
of the number of poor school-age children for use in the allocation of funds to counties and school districts under Title I of the Elementary and Secondary Education Act. In considering that panel’s conclusions, CNSTAT decided that it was important to explore these issues in a broader context, starting with the workshop and proceeding to a more comprehensive panel study.
The Panel on Formula Allocations was formed in January 2001 with sponsorship by the National Center for Educational Statistics and also, in part, by the many U.S. federal statistical agencies that support CNSTAT through the National Science Foundation. The panel’s charge was to refine and follow up on the important issues identified in the workshop, conduct case studies and methodological investigations, obtain input from individuals who design and implement programs using formula allocation, and to develop findings, conclusions, and recommendations relating to these issues. Initially, the panel concentrated its efforts on technical and conceptual statistical issues but, as the study progressed, found it essential to embed the statistical issues in a broader political and policy framework.
In July 2001 the panel issued Choosing the Right Formula: Initial Report (National Research Council, 2001), which featured the report of the April 2000 workshop, highlighted key issues identified by the panel, and communicated its work plan. In conjunction with its own work, the panel also commissioned a series of papers—some devoted to case studies and others to an examination of the goals of formula allocation programs, the specific roles played by formulas, and the statistical features of allocation formulas and processes. Several of these papers were presented at the panel’s December 2001 meeting, and all of them are assembled as a special issue of the Journal of Official Statistics (September 2002). The journal issue is intended to serve as a companion to this, the panel’s final report, and is a key component of the panel’s work toward fulfilling its charge.
I am confident that you will find the panel’s final report interesting and informative. Using allocation formulas to advance legislative aims has become a widely employed policy tool. The panel hopes that this report will be helpful in informing the process in the future when allocation formulae are being crafted in legislation.