An overview of cost analysis is provided as it relates to a particular educational reform--the use of performance or authentic assessment on a large scale as a means of transforming entire educational systems. The focus of the inquiry is the New Standards Project (NSP), a joint effort of the National Center on Education and the Economy and the Learning Research and Development Center at the University of Pittsburgh. The design of the NSP is the prototype of the cost analyses discussed, but the costs of the NSP are not discussed per se. Chapter 2 provides a conceptual examination of pitfalls associated with cost analysis. Chapters 3 through 6 generate preliminary estimates of the costs associated with large-scale pupil-performance assessment. While the Chapter 3 focus is on development costs, Chapters 4, 5, and 6 deal with operations costs in large, medium, and small states, respectively. Chapter 7 draws the results together and places cost estimates in context, placing upper and lower bounds on the magnitude of costs associated with large-scale performance assessment. Systemic reform does not lend itself to conventional cost analysis, but these results are intended to provide some guidelines for policymakers. Two figures and 11 tables illustrate the analysis. (Contains 37 references.) (SLD)