Evaluating Specification Tests in the Context of Value-Added Estimation

Cassandra Guarino, Mark D. Reckase (), Brian Stacy () and Jeffrey Wooldridge
Additional contact information
Mark D. Reckase: Michigan State University
Brian Stacy: World Bank

No 7974, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We study the properties of two specification tests that have been applied to a variety of estimators in the context of value-added measures (VAMs) of teacher and school quality: the Hausman test for choosing between random and fixed effects and a test for feedback (sometimes called a "falsification test"). We discuss theoretical properties of the tests to serve as background. An extensive simulation study provides important further insight to the VAM setting. Unfortunately, while both the Hausman and feedback tests have good power for detecting the kinds of nonrandom assignment that can invalidate VAM estimates, they also reject in situations where estimated VAMs perform very well. Consequently, the tests must be used with caution when student tracking is used to form classrooms.

Keywords: teacher labor markets; teacher quality; value-added (search for similar items in EconPapers)
JEL-codes: C01 I20 J01 J45 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2014-02
New Economics Papers: this item is included in nep-ecm
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Citations: View citations in EconPapers (4)

Published - published in: Journal of Research on Educational Effectiveness, 2015, 8 (1), 35-59.

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