Researchers construct a cost of education index and, using Missouri data, estimate differences across school districts in the cost of teachers, administrators, and transportation services. Components of the conceptual framework for the index include salaries, variables within a district's control (such as personnel characteristics or the number of pupils transported), and variables not within district control (such as labor market characteristics, road conditions, or pupil density). A formula for the index is determined, based on these components and the relative importance of personnel and transportation costs in district budgets. Equations for costs are then estimated from 1975-76 Missouri data, based on variables that include (1) personnel education, experience, position, subject area, and educational level; (2) district demographic, economic, and climatic characteristics; and (3) numbers, density, and distances of pupils transported. Computation of the overall cost of education index indicates that Missouri's urban and suburban districts pay above-average costs, while its rural districts pay below-average costs. The researchers briefly examine the stability of the index over time, simulate the application of the index to the state aid formula, and discuss the implications of the index for educational equity and efficiency. (RW)