EFFICIENCY OF EDUCATIONAL PRODUCTION - AN ANALYSIS OF NEW-YORK SCHOOLDISTRICTS

Theoretical consideration of technical efficiency has existed since Ko opmans (1951), which defined technical efficiency for production possi bilities for which it is impossible to increase any output without sim ultaneously increasing any input. The nonparametric approach to effici ency estimation is based not on this definition bur rather on Farrell' s index. Even after Farrell efficiency is achieved there may exist add itional slack in individual inputs, implying that Farrell efficiency d oesn't measure inefficiency. To solve this problem, this paper suggest s incorporating programming results into a second-stage multivariate r egression analysis. For illustrative purposes, this technique is appli ed to analyze New York State school districts.