The Theory and Logic of Value-Added Indicators

Alternative Uses of Standardized Tests and Assessments

The results of standardized tests and assessments can be used to measure the achievement of individual students, produce aggregate indicators of the level and distribution of achievement for groups of students, evaluate the efficacy of specific school policies and inputs, and measure school performance. The focus here is on the latter application, although the tasks of measuring school performance and evaluating school policies and inputs are closely related.

It is not widely appreciated that properly constructed school performance indicators differ greatly from simple aggregate indicators such as average test scores, in part because test vendors have tended to focus attention on measuring student achievement rather than school performance. Increasingly, however, schools, states, and other groups are interested in assessing the performance of schools as well as students through standardized tests. It is therefore important to draw a sharp distinction between school performance indicators and simple aggregate indicators based on test scores.

The most common aggregate indicators are average and median test scores and the share of students scoring above or below a given threshold. These "level" indicators measure some feature of the level of student achievement rather than, for example, growth in student achievement (Meyer, 1994). Level indicators are widely reported by schools, states, test vendors, and national organizations such as the National Assessment of Educational Progress. If correctly constructed and based on appropriate tests or assessments, level indicators convey useful descriptive information about the proficiencies of students in particular classrooms, schools, or groups. It is appropriate to use indicators of this type to target assistance, financial or otherwise, to schools that serve students with low test scores. Such indicators are not a valid measure of school or classroom performance, however.

Value-Added Indicators: An Introduction

The question of how to measure school performance is, fundamentally, a technical statistical problem, similar to the task of measuring the efficacy of school policies and inputs, and one that has been addressed in the evaluation literature for well over three decades and continues to be an active area of research.3 The common characteristic of the value-added models used in the literature is that they measure school performance or the effect of school policies and


See, for example, Coleman (1966), Hanushek (1972), Murnane (1975), Boardman and Murnane (1979), Raudenbush and Bryk (1986), and Meyer (1992). For studies explicitly focused on school performance indicators, see Dyer et al. (1969), Willms and Raudenbush (1989), Hanushek and Taylor (1990), and Meyer (1994).

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