The effect of school spending on student achievement: addressing biases in value-added models

Publication type

Journal Article


Publication date

February 15, 2018


The estimation of education production models used to evaluate the effect of school inputs and past skills on test scores, often called value-added models, can be biased by three main econometric issues: unobserved child characteristics, unobserved family and school characteristics and measurement error. We propose a two-step estimation technique which exploits the availability of test scores across time, subjects, families and schools in a unique administrative data set for England to correct for these potential biases. Our empirical results suggest that omitting school characteristics biases the estimation of the effect of school expenditure, whereas omitting unobserved child endowment biases the estimation of the effect of past skills but not the effect of school expenditure.

Published in

Journal of the Royal Statistical Society Series A (Statistics in Society)

Volume and page numbers

Volume: 181 , p.487 -515






Open Access

This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.



Latest findings, new research

Publications search

Search all research by subject and author


Researchers discuss their findings and what they mean for society


Background and context, methods and data, aims and outputs


Conferences, seminars and workshops

Survey methodology

Specialist research, practice and study

Taking the long view

ISER's annual report


Key research themes and areas of interest