Published: February 1, 1995

Does Money Matter?

The panel of economists that put together the report based its conclusions in part on studies done in the 1980s by Eric Hanushek, the lead author of the new book. Hanushek, a professor of economics and political science at the University of Rochester, analyzed all existing studies that looked for relationships between additional resources and student learning. He determined that, in most cases, those resources had had no effect. Over the years, his findings have found champions in a number of conservative critics of schools, most notably former U.S. Secretary of Education William Bennett.

But in another study published last year, a different group of researchers looked at the same data and came to the opposite conclusion. Writing in the April 1994 issue of the journal Educational Researcher, Larry Hedges, Richard Laine, and Rob Greenwald said higher spending on schools had produced higher student achievement.

Who is right? The answer, a number of observers say, is...