Department Chair

Frederick Floss, Ph.D., Chair and Professor of Economics and Finance

Date of Award

5-2018

Access Control

Open Access

Degree Name

Applied Economics, M.A.

Department

Economics and Finance Department

Advisor

Frederick Floss, Ph.D., Chair and Professor of Economics and Finance

Department Home page

http://economics.buffalostate.edu/

First Reader

Frederick Floss, Ph.D., Chair and Professor of Economics and Finance

Second Reader

Joelle Leclaire, Ph.D. Associate Professor of Economics and Finance

Third Reader

Theodore Byrley, Ph.D. Associate Professor of Economics and Finance

Abstract

This study set out to find out more about the costs and benefits of educational spending. This was goal was then split into the steps of: reviewing previous literature, developing a model, and testing the model. The main difficulties associated with this were in finding appropriate substitutes for the theoretical variables. Due to the limited availability of data, this study focused on the six-year high school graduation rate of New York State Counties, class size, income, and spending per student as variables. These variables represented educational level, a portion of the efficiency of spending, the parent’s ability to help educate their children, and both the short and long-term spending of schools respectively.

The results were that spending per students was not significant. This was likely due to the low variability between counties, potential errors in data collection, and the multicollinearity associated with combining multiple variables in the theoretical model. Class size was found to require income to be in the model in order be significant. This points to income potentially containing part of the short-term and/or long-term spending component of the theoretical model, making income a poor substitute.

The suggestions for future studies are to: avoid the poor substitutes found by this study, reduce the level of aggregation by looking at either a school or district level, as well as looking through the theories for other substitutes to use and acquiring more data if possible.

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