The study presented in this paper is part of the National Institute of Education's effort to study federally sponsored compensatory education programs through demonstration projects. One aspect of the study of demonstration projects concerns the cost associated with the changes in allocation procedures and concentration levels which result from the demonstration. This paper describes the framework of the cost study, the nature of the data to be collected and the general approaches to data analysis. Along with a discussion of the modified analytic model of the study, the paper focuses on the following: (1) allocation policies to be used by Demonstration Local Educational Agencies, (2) factors likely to influence Title I resource use and costs, (3) hypotheses concerning the effects of allocation policy and other factors on program delivery and program costs, and (4) program delivery. Data will be collected for each of the three years of the project. Baseline data for the demonstration planning year, 1975-1976 is presently being analyzed. Analysis of the first Demonstration year, 1976-1977, is expected to be completed in December, 1977. (Author/AM)