This publication was undertaken so that educators, the public, and policymakers might better understand both geographic and inflation adjustments, and how they might be applied to elementary/secondary education. The authors seek to inform these audiences of the differences in expenditures and costs, as well as how both geographic and inflation education cost adjustments can be used to assist in differentiating nominal and real costs. The authors are particularly concerned with approaches, techniques, and adjustments that may either not be appropriate for measuring costs in education, or that are inappropriately applied. In addition, they attempt to show that there is a real virtue to keeping cost adjustment indices as simple and understandable as possible. Cost adjustments for different geographic locations and for inflation are widely accepted and applied outside of elementary and secondary education. Virtually everyone has heard of the Consumer Price Index (CPI), published by the U.S. Department of Labor, Bureau of Labor Statistics, as an inflation index. In addition, the public is also aware of cost-of-living differences between major metropolitan areas, and its effect on attracting workers with additional compensation. Many educators, however, have not yet chosen to implement either geographic or inflation education cost adjustments. Because there may not be a single best cost adjustment, it is important to share the approaches that have been utilized, examining the strengths and weaknesses of each. Because this work presents the view of the authors, and is intended to promote the exchange of ideas among researchers and policymakers, no official support by the U.S. Department of Education or NCES is intended or should be inferred.
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