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Racial/ethnic educational opportunity gaps are well documented, but often, the sources of these gaps are less fully known. This study documents geographic variation in Black-White and Hispanic-White gaps in Advanced Placement (AP) course enrollment, test-taking and test-passing and uses multivariate regression techniques to examine the explanatory power of a variety of potential correlates to these gaps: residential segregation, school segregation, demographic differences, socioeconomic differences, variation in adult educational attainment and occupation, implicit racial bias, and teacher compensation policies. This study investigates which factors are most predictive of these racial gaps and whether state policies that use differential compensation for teachers in high-needs areas may help to alleviate such gaps, informing both policy and practice.