School value-added models are widely applied to study, monitor, and hold schools to account for school differences in student learning. The traditional model is a mixed-effects linear regression of student current achievement on student prior achievement, background characteristics, and a school random intercept effect. The latter is referred to…

We study the relative performance of two policy-relevant value-added models--a one-step fixed effect model and a two-step aggregated residuals model--using a simulated data set well grounded in the value-added literature. A key feature of our data generating process is that student achievement depends on a continuous measure of economic…