The typical indicators used to assess a school's performance - average and median achievement test scores - are highly flawed. Simulation results indicate that these indicators provide a severely misleading portrait of changes in school performance over time and differences in performance across schools, particularly if students change schools a lot or school performance varies significantly over time. Moreover, these indicators provide schools with the incentive to cater to students who score high on achievement tests, and they tend to be biased against schools that serve a large number of academically disadvantaged students. Better than average and median test scores are gain indicators, which measure the growth in achievement from one grade to the next for a given group of students, and value-added indicators, which rely on a statistical model to identify the distinct contributions of schools to growth in student achievement at a given grade level. In order to implement valid school performance indicators, schools should test students every two years, if not annually, beginning with kindergarten; collect better data on student and family characteristics; and develop tests that are sound and attuned to their educational goals.
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