Environmental complexity is comprised of the heterogeneity and dispersion of the school district’s student population. A diverse student population means that the school district has to address a multitude of needs and challenges. This diversity index is similar to a Herfindahl index and measures the diversity of the district and the equitability with which the groups are distributed. The index includes black, Latino, white and those students in the catchall category ‘other’ that includes Asians and Native Americans. This index allows for the incorporation of group competition in the district. Dispersion is measured with three variables: the number of students in the district, the number of schools in the district, and the density of the school district (the number of students per 10,000 square meters). The district complexity is created via principal components analysis.