ABSTRACT
The evaluation of education cost differentials across school districts has been an important topic in education fi nance research for decades (Fowler and Monk, 2001). Interest in this topic has grown in recent years with the emergence of adequacy as the primary standard in school fi nance litigation and the growth of state accountability systems that focus on student performance. Each of these developments calls attention to the fact that some districts must spend more than others to obtain the same performance; that is, to education cost differentials. The link between research and policy on this topic is not well developed, however; existing state aid formulas usually contain ad hoc cost adjustments that fall far short of the across-district cost differences estimated by scholars. The objective of this chapter is to synthesize the research literature on education cost differences across school districts and to discuss the implications of this literature for state education aid formulas. The material in this chapter complements the discussions of equity and adequacy in chapters 12 and 13.
