Measurement of technical efficiency in public education: A stochastic and nonstochastic production function approach

This paper uses both the stochastic and nonstochastic production function a pproach to measure technical efficiency in public education in Utah. The st ochastic specification estimates technical efficiency assuming half normal and exponential distributions. The nonstochastic specification uses two-sta ge data envelopment analysis (DEA) to separate the effects of fixed inputs on the measure of technical efficiency. The empirical analysis shows substa ntial variation in efficiency among school districts. Although these measur es are insensitive to the specific distributional assumptions about the one -sided component of the error term in the stochastic specification, they ar e sensitive to the treatment of fixed socioeconomic inputs in the two-stage DEA.