Interpreting Tests of School VAM Validity

New Findings, School Reform, May 2016

Public school dis­tricts increas­ing­ly look to the esti­mates gen­er­at­ed by val­ue-added mod­els (VAMs) to mea­sure school and teacher qual­i­ty. A typ­i­cal VAM com­pares aver­age stu­dent test scores across teach­ers or schools while using regres­sion mod­els to con­trol for stu­dents’ past scores and demo­graph­ic char­ac­ter­is­tics. The result­ing esti­mates serve as inputs into teacher reten­tion and pro­mo­tion poli­cies, school report card sys­tems, and deci­sions about which schools to close, restruc­ture, or expand. This paper lays out the econo­met­ric the­o­ry behind lot­tery-based VAM valid­i­ty tests.