Many parents believe that enrolling their children in the "right" school is tantamount to launching them on a trajectory towards future success and happiness. In urban centers, parents often pursue well-regarded magnet, charter, or private schools, and compete fiercely even for admission to preschool. In surrounding neighborhoods and suburbs, the competition is less visible but no less intense. For those who can afford it, school quality frequently drives the decision of where to live, with parents paying a substantial premium for a home within a particular school's boundaries.1 As such, the quest for high quality schools profoundly influences housing markets and neighborhood demographics.
Or perhaps it would be more accurate to say that housing markets and neighborhood demographics are profoundly influenced by parental perceptions of school quality. Beyond word of mouth, these perceptions are influenced by two sources: (1) school rankings and ratings published by various private entities and (2) report cards and other information disseminated by state departments of education. The problem is that these sources are neither accurate nor neutral. And it gets worse. The information is often provided in a way that is not only misleading for parents, but also contributes to neighborhood and school segregation, as well as related social problems.
Most rankings use a student body's aggregate performance on standardized proficiency tests to gauge school quality - that is, the overall percentage of a school's students who score below, at, or above state grade-level standards. This methodology ignores the achievement gap: the well-documented phenomenon that, on average, wealthier students outperform poorer students on these tests and Asian and White students outperform Black and Hispanic students.2
The achievement gap is not inevitable, and educators are working hard to close it. Yet, while the gap persists, wealthy and White schools will almost always have higher aggregate proficiency scores and thus outrank schools that serve a diverse mix of students. This is true even if a particular school serves each subgroup of its student population better than higher ranked schools do. In other words, a school that ranks high in how well it serves advantaged students and high in how it serves disadvantaged students will appear to be average or below in its overall ranking if it has a sufficient proportion of disadvantaged students.
This Article's empirical analysis - the first to explore the interplay between diversity and elementary and secondary school rankings - demonstrates just how dramatic the effect is. Once test performance is disaggregated by socioeconomic and racial subgroups, it becomes clear that, across the country, demographics drive the rankings, not actual school quality. For example, when re-ranked by demographic subgroup, diverse high schools in Illinois and New Jersey draw virtually even with non-diverse neighbors that are touted as among the very best schools in the Chicago and New York areas.
Unfortunately, and with rare exception, school report cards and accountability measures also emphasize aggregate performance on proficiency tests. Messages regarding school quality from official sources thus tend to reinforce rather than counteract the market misimpressions created by private rankings.
All of this might be less objectionable if there were some independent reason why aggregated proficiency test scores were the best measure of school quality. But economists and educators have long maintained that a school's marginal effect on its students - that is, the knowledge and skills the school adds to what the student initially brings to the table - is the best measure of school quality.3 Moreover, aggregated test scores and corresponding rankings are a misleading indicator for all demographic subgroups, including low-income students and historically-disadvantaged minorities. …