How close are we to enjoying truly free educational marketplaces in this country? Not very, according to our newly released Cato Education Market Index (CEMI).


Well over a year in the making, CEMI measures how closely existing school systems resemble free markets and rates education policy proposals on their conduciveness to the rise of markets. The verdict? No state in the nation even comes close. The two top scoring states, Wisconsin and Connecticut, tied with a score of 26 out of 100. 


Why is Wisconsin — with its vouchers, charter schools, and public school choice — rated so low? Why is Connecticut — which lacks vouchers and has few charter schools — rated the same?


The answer to the first question is that Wisconsin’s voucher program enrolls only about 1 percent of the state’s students, while its charter schools only enroll about 3 percent. These numbers are too low to have a significant impact on the level of education market activity statewide. And public school choice just isn’t close to real market activity because public schools are too standardized by state and disctict policies and regulations, can’t be operated for profit, don’t charge tuition, and neither open nor close exclusively in response to consumer demand.


Connecticut has among the most public school choice and the least intrusive public school regulation in the country, along with a truly free private education sector that is larger than the national average. But private schools serve only 11 percent of the state’s population, so it, too, only rates a 26.


Anyone interested in how the numbers were crunched can have a look the paper linked to above. The brave of heart may also want to dig into the uber‐​Excel spreadsheet that contains all the input data (100 data points per state), the calculations, and the tabulated results.


The full technical report contains regression analyses showing that higher CEMI ratings are correlated with both higher test scores and higher graduation rates.


Brief explanations of all the state ratings can be found here.