District Factor Groups

The New Jersey Department of Education introduced the District Factor Grouping system (DFG) in 1975. This system provides a means of ranking school districts in New Jersey by their socioeconomic status (SES). The first DFG was based on data from the 1970 decennial Census. A revision was made in 1984 to take into account new data from the 1980 Census and to slightly change the theoretical model of socioeconomic status. Following is a description of the work undertaken in the construction of the third DFG, reflecting data from the 1990 Census.

The DFG was motivated by research conducted in the late 1960's and early 1970's that showed a strong relationship between socioeconomic status and educational outcomes. The creators of the DFG were concerned that educational policymakers, after reviewing the educational outcomes obtained in different circumstances, would make unjustified inferences about the importance of various, school-based inputs to the educational process. Because the research showed that students (i.e. what students bring to school, including socialization that takes place before they step inside the school building) are the most important determinant of educational outcomes, the effectiveness of school systems cannot be sensibly judged without reference to the socioeconomic background of their students.

The DFG was developed by the Department for its own use in the reporting of test scores. The use of this measure is mandated neither by statute nor by regulation. In its publicly released testing reports, the Department shows district-by-district results, arranged by DFG. Comparisons are made between districts of like SES, rather than on a geographic basis. The intent of this procedure is to reduce the variation in reported scores which is due to factors beyond the control of local educators.

At the same time as the DFG was being developed for use in the reporting of test scores, New Jersey's debate over how schools could be equitably financed had already become a state supreme court case (Robinson v. Cahill). Arguments made before the courts in Robinson and later in Abbott took explicit account of the DFG and socioeconomic status in calculating spending differences between districts. Because the supreme court explicitly used the DFG as a means of identifying the districts for which special funding provisions would apply, as well as those districts whose spending levels are to be the target, the DFG has taken on new and increased significance.

The DFG is an index of socioeconomic status that is created using data for several "indicators" available in the decennial Census of Population. Socioeconomic status cannot be measured directly. Rather, the literature holds that it is a function of other, measurable quantities (traditionally, the basic three are income, occupation, and education). Therefore, the DFG is a composite statistical index created using statistical procedures, a "model" of socioeconomic status, and input data for various socioeconomic traits. Seven indices were developed from the census data as follows:

1. Percent of population with no high school diploma


2. Percent with some college


3. Occupation


4. Population density


5. Income


6. Unemployment


7. Poverty

These seven indices were utilized in a principal components analysis to produce a statistical score which was used to rank the districts. Districts were then grouped so that each group would consist of districts having factor scores within an interval of one tenth of the distance between the highest and lowest scores.