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We'll use a hierarchical model to help us understand state-level averages in the funding gap: each state will have a state-level mean i with common

We'll use a hierarchical model to help us understand state-level averages in the funding gap: each state will have a state-level mean i with common mean , and for each district j in state i, the funding gap yij will be normally distributed with mean i . We'll assume the variances are known, so the model can be written as

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