Evidence-based spending decisions?

You know that I'm a big supporter of evidence-based risk management.  And since risk management is basically a decision support system, I'm really advocating for evidence-based decision making.  This is an example of something I was thinking about that doesn't have to do with information security, but does involve making a decision based on evidence.  It's also an excuse to play around in R.

I came across an article tonight about the relationship between spending on education (per-pupil) and a state's overall rank in education.  Often times I hear that my state, Minnesota, was one of the best states for education in the nation and that now we are slipping.  And I often hear that the solution to the problem is that we should spend more money on education.  But a few weeks ago I was wondering if that is really true.  Should we spend more money on education so that Minnesota can be the best in the nation?

The way I see it, states (like people) can be good at some things and poor at other things.  It would be very expensive for us to try to be the best at everything, so we need some way to decide which things we're going to be the best at and which ones we're going to try to suck less at but not compete for #1.  My idea was that instead of looking at per-pupil spending alone, we should look at state rank in relation to per-pupil spending and see if there is any evidence that we're better at it than other states.  But I was busy and I was in the car so I didn't get around to doing it.

Well tonight I read the article I mentioned which talked about the relationship between per-pupil spending and state rank.  The link is here: http://nationaljournal.com/thenextamerica/education/analysis-how-much-states-spend-on-their-kids-really-does-matter-20121016

After I read the article I went to kidscount.org, which seems to be an initiative of the Annie E. Casey foundation.  There were some things that pleasantly surprised me and some which disappointed me.  For example, I was impressed to se that I can look up a variety of indicators about state education ranking and download them in CSV format for easy number crunching.  I was disappointed that while we can find a 2012 ranking of each state's education quality, we can only get 2009 per-pupil spending.  But I decided to work with what I had rather than hunt down another data source because I was feeling lazy tonight.  So I took a couple spreadsheets, combined them together and then ran this R code to look at the data

edu <- ducation_rank.csv="ducation_rank.csv" header="T)</font" read.csv="read.csv">
reg <- edu="edu" font="font" lm="lm" rank2="rank2" spending="spending">
plot(edu$spending,edu$rank2,xlab="Spending",ylab="Rank")
abline(reg)
identify(edu$spending, edu$rank2,edu$Location)

I picked out a few points to label and came up with this graphic.

One thing worth mentioning is that I reversed the states ranks because I wanted the regression line to point up instead of down.  I just think it looks prettier that way.  So the state ranked last (50th) got changed to 1 and 1 got changed to 50.  The regression line shows basically how much a state's rank should move in relationship to the per-pupil spending.  Some states, like Texas and Kentucky, are right on the regression line which means they are getting the average bang for their education buck.  Then there are the states that are above the line.  These are states that are ranking higher than what their spending suggests they should be.  In other words, these states appear to have some competitive advantage which allows them to get higher quality for fewer dollars.  These are the states that we should be looking to for ideas on how to improve education everywhere.  The distance between the line and a state's point shows just how much better they are.  Colorado, for example, is way above the line.  So whatever they're doing in Colorado, Massachusetts, and (yes) Minnesota they are doing very well.  States like Alaska and West Virginia, are very far below average.  West Virginia spends nearly the same amount of money per-pupil as Pennsylvania and yet has one of the worst rankings.  These states can pour more money into education, but the graphic suggests that there are efficiency problems and that they would have to put a tremendous amount of money into education if they want to move up in the standings.  These states should probably put money into researching why they are so inefficient.  Just looking at the states I can't help but wonder if population density is part of the problem.  Maybe Alaska spends a lot of money getting teachers to really remote parts of the state, for example.

So should Minnesota spend more on education?  I think the data says that we should if being the number one state is really something that we want to do.  If we want those bragging rights then we can probably achieve it because we appear to have a competitive advantage over other states.  But if Colorado decides to get serious about its rank it could potentially dominate in the standings.  Colorado's competitive advantage is strong enough that they could take Massachusetts' rank while spending Delaware's dollars.