What Are Error Rates for Classifying Teacher and School Performance Using Value-Added Models?

This article addresses likely error rates for measuring teacher and school performance in the upper elementary grades using value-added models applied to student test score gain data. Using a realistic performance measurement system scheme based on hypothesis testing, the authors develop error rate formulas based on ordinary least squares and Empirical Bayes estimators. Empirical results suggest that value-added estimates are likely to be noisy using the amount of data that are typically used in practice. Type I and II error rates for comparing a teacher’s performance to the average are likely to be about 25% with 3 years of data and 35% with 1 year of data. Corresponding error rates for overall false positive and negative errors are 10% and 20%, respectively. Lower error rates can be achieved if schools are the performance unit. The results suggest that policymakers must carefully consider likely system error rates when using value-added estimates to make high-stakes decisions regarding educators.