Anticipating the consequences of school reform: A new use of DEA

We use DEA-type Linear programming techniques to simulate a basic component of educational reform-eliminating restrictions on the allocation of school personnel. Our technique allows us to identify potential output gains (or equivalently potential cost savings) from reform. We can also identify whic h personnel groups are likely to gain and lose under this reform. When we a pply our model to a sample of Texas school districts, we find evidence that the educational establishment has substantial economic rents to protect fr om school reform, and that the primary beneficiaries of reform are likely t o be affluent school districts with few minority students. The technique, w hich relies on the relationship between the direct and indirect distance fu nctions, can be easily generalized to measure the potential gains from remo ving other input restrictions such as union work rules, environmental regul ations, or deed restrictions.