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Budget-Constrained Frontier Measures of Fiscal Equality and Efficiency in Schooling

Shawna Grosskopf1; Kathy Hayes2; Lori L. Taylor3; William L. Weber4

1 Southern Illinois University · 2 Southern Methodist University · 3 Federal Reserve Bank of Dallas · 4 Southeast Missouri State University

The Review of Economics and Statistics 1997

Equality and efficiency are key issues in educational reform. Here the authors analyze the efficiency and equality consequences of various school finance reforms using a cost-indirect output distance function. This function readily models multiple-output production under conditions of budgetary constraint, and provides a natural measure of performance that is closely related to Farrell-type measures of efficiency. The analysis suggests that despite school district inefficiency, finance reforms can affect student achievement. However, any potential gains in output from redistribution are dwarfed by the potential gains from increased efficiency. More strikingly, the analysis demonstrates that budgetary reforms designed to equalize expenditures could actually increase the inequality of student achievement.

DOI
10.1162/003465397556458
Volume
79 (1)
Pages
116-124
Language
en
Export
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