Market-Based Measurement for School Achievement

Abstract

Over the last thirty years state governments have paid ever-increasing attention to the results of standardized testing to identify successful schools, rewarding those with better performance by allocating to them a greater share of resources. Although traditional, high-stakes, standardized testing has been shown to be effective at measuring discrete skills or a predetermined list of facts, the overwhelming majority of research into its effectiveness shows not only that these tests fail to measure educational quality but also that their use tends to negatively affect the intellectual development of students in the classroom. This paper argues for an alternative mechanism to evaluating school achievement. We claim that a free-market approach to education, one that includes central features of market systems—profits, market entry, price changes, product differentiation, and competition—not only provides a better mechanism than the use of high-stakes testing by which to allocate limited financial resources and motivate academic achievement, but also serves as a more accurate tool to measure the quality of school programs.

Keywords: School Choice

JEL Classification: I28