The Effect of Per Pupil Expenditure on ACT Scores

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Dr. John Lunn, Hope College

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The average state expenditure on education has increased by almost one hundred percent from 1995 to 2008. Regression results using state level data from the U.S. Census Bureau, National Center of Education Statistics, and the ACT show that a state’s total expenditure does not have a significant effect on average composite ACT scores when controlling for race, median household income, the percentage of population living in poverty, and the pupil per teacher ratio for each state. Although the results do not show a correlation between education expenditure and ACT scores, the results show that the poverty level does have a significant negative effect on test scores. This suggests that more research be done on the effects of socioeconomic status on academic performance.

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