Nondiscretionary environmental inputs are critical in explaining relative efficiency differences and productivity changes in public sector applications. For example, the literature on education production shows that school districts perform better when student poverty is lower. In this paper, we extend the nonparametric approach to decompose the Malmquist Productivity Index suggested by Färe et al. (American Economic Rewiew 84:66–83, 1994) into efficiency, technological and environmental changes. The approach is applied to analyze educational production of Ohio school districts. Applying the extended approach in an analysis of the educational production of 604 school districts in Ohio, we find changes in environmental harshness are the primary drivers in productivity changes of underperforming school districts, while technical progress drives the performance of top performing school districts.
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Johnson, A.L., Ruggiero, J. Nonparametric measurement of productivity and efficiency in education. Ann Oper Res 221, 197–210 (2014). https://doi.org/10.1007/s10479-011-0880-9
- Data envelopment analysis
- Nondiscretionary inputs