What Can We Learn from Education Production Studies?

The results of a Becker–Peltzman–Stigler model of local school district decision-making yields biased or inconsistent efficiency measures when some school outputs are not measured. Empirical investigation of data for 95 Tennessee counties in the 1999–2000 academic year finds that Data Envelopment Analysis (DEA) efficiency measures, and efficiency rankings based on those measures, are highly sensitive to changes in the number of output measures used. An artifact of the DEA process causes increasing correlation of efficiency scores with the inverse of per pupil expenditures as outputs increase. Hence, high-stakes policy initiatives should not be based on such scores.