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Teacher pay in Arkansas public schools varies widely from district to district across the state. This pay discrepancy is driven by both the funds available to a district and by how these funds are allocated. A standard per student budget is given to districts across the state, but this budget can be supplemented by additional property taxes collected on property within a district. This leaves districts with more highly valued property at an advantage. Districts are free to allocate their budget for teacher pay as they see fit, with constraints on number of students per teacher and minimum teacher salary.

Using public data available through the Arkansas Department of Education, this research investigates what variables affect student performance in Arkansas public schools using feature selection and predictive modelling and determine the cost-effectiveness associated with changing possible decision variables in terms of improving student performance.

It was found that the most cost-effective ways for districts to increase student performance are to (1) increase average teacher salary and (2) increase average years of teacher experience. This result is validated by education research, as both of these methods have been identified in literature as being effective ways to increase teacher quality and increase student performance. Furthermore, districts should consider increasing student–teacher ratio and applying the resulting savings toward teacher salaries.

This methodology gives a fresh perspective on the most cost-effective use of resources in publicly funded schools.