The Commonwealth of Pennsylvania plans to develop a new statewide evaluation system for teachers and principals in its public schools by school year 2013-2014. To inform the development of this evaluation system, the Team Pennsylvania Foundation (Team PA) undertook the first phase of the Pennsylvania Teacher and Principal Evaluation Pilot--henceforth referred to as Phase 1--2010 and 2011 in collaboration with a broad stakeholder group that included leaders from the Pennsylvania Department of Education (PDE), the Pennsylvania State Education Association (PSEA), school districts, and the business community. The purpose of Phase 1 was to develop and implement a pilot set of performance measures to obtain lessons for improving the use of classroom observations and student data in evaluating teacher and principal performance. None of the results from Phase 1 had a bearing on actual evaluations or personnel decisions for any teacher or principal. This report presents findings for the second track of Phase 1. In this track, Mathematica Policy Research used student-level data to develop value-added models (VAMs) for estimating teacher and principal effectiveness. VAMs estimate the effects of educators on student achievement growth. VAMs belong to the class of models that are generally referred to as student growth models, but a VAM estimate is not a measure of student growth; rather, it is an estimate of an educator's or a school's "contribution" to student growth. VAMs can be appropriate for use in teacher or principal evaluations because they produce information about educator effectiveness. Other indicators like student proficiency rates and descriptive measures of student growth might be appropriate as targets for school accountability purposes, but they should not be viewed as indicating what a teacher or school has contributed to student learning. (Contains 2 figures, 1 table and 1 footnote.) [For the "Value-Added Estimates for Phase 1 of the Pennsylvania Teacher and Principal Evaluation Pilot. Full Report", see ED531795.]