A cost effectiveness study by the Austin (Texas) Independent School District of its elementary compensatory reading programs, namely, the Chapter 1 Reading Improvement Program (Chapter 1 Regular) and Schoolwide Projects (SWP), found that the Schoolwide Projects cost two to three times as much to achieve the same gains in student achievement as did the Chapter 1 Regular program. Both programs are funded by the Education Consolidation and Improvement Act Chapter 1. Both programs measure improvement in reading skills with the Iowa Test of Basic Skills. The programs differ in the way that instruction is delivered. Chapter 1 students receive supplementary instruction from a reading specialist. SWP students receive all of their instruction in a classroom with students of mixed achievement levels, but where the pupil-teacher ratio has been reduced to 15-to-1. To measure achievement gains, percentiles were converted to Normal Curve Equivalents (NCE) and students' pre-test scores were compared to their post-test scores. Only teachers' salaries were used as the program cost. The cost per student was divided by the average NCE gain to obtain a cost-effectiveness figure that translates into dollars per NCE gain for each program for each year of implementation. A list of references is included. Statistical data are included on four tables. (FMW)