In fiscal year 1979 the distribution of more than onefifth of the federal budget, over $120 billion, was determined to some extent by allocation formulas using statistical data.'The emerging predominance of large block grants over categorical aid programs will lessen but not remove the role of data-based allocation formulas, especially in the field of education. Furthermore, the 1980s will likely see increasing activity by state governments in designing formulas. Formula design is difficult technically as well as politically. This paper gives a non-technical discussion of some technical issues in formula design.
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Bruce D. Spencer (1982) studied this question.