Working Paper: NBER ID: w14099
Authors: Barbara M. Fraumeni; Marshall B. Reinsdorf; Brooks B. Robinson; Matthew P. Williams
Abstract: In a previous paper, the authors took the first step in their research on measuring the education function of government by estimating real output measures (Fraumeni, et. al. 2004). In this paper, chain-type Fisher quantity indexes for those output measures are calculated to be more consistent with Bureau of Economic Analysis (BEA) methodology and the real output measures presented in the previous paper are refined. In addition, and more importantly, implicit price deflators are presented to give a more complete picture. Alternative price and real output measures are compared; it is clear that methodology choice matters. Price change is always greater than quantity change for the periods given; however, price changes are overstated to the extent quality changes are not captured in the quantity indexes. Quality-adjustments continue to be the most challenging aspect of decomposing nominal expenditures for government-provided education into price and quantity components.
Keywords: Education; Government Expenditures; Output Measures
JEL Codes: O40
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| teacher quality (A21) | student learning outcomes (A22) |
| pupil-teacher ratios (A21) | student learning outcomes (A22) |
| methodology used for measuring price and quantity changes (C82) | observed growth rates in educational expenditures (H52) |
| lack of quality adjustment (C43) | overestimation of price changes (E30) |
| lack of quality adjustment (C43) | underestimation of quantity changes (C51) |