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ABSTRACT. Demands for accountability in education are not a new phenomenon, however, they have increased significantly in the recent past and have encompassed not only educational outcomes but also efficiency. In this study, ratio measures, similar to those recommended by the GASB, were compared to measures of relative efficiency determined through the use of data envelopment analysis (DEA). The consistency of the two approaches in distinguishing between relatively efficient and inefficient school districts was examined. It was found that compared to the DEA approach, the ratio measures, may be unable to provide reliable information for educational decision making.
INTRODUCTION
While demands for accountability in education are not a new phenomenon, they have increased significantly in the recent past and have encompassed not only educational outcomes but also efficiency. While a number of approaches have been used to assess educational efficiency, the Governmental Accounting Standards Board (GASB) has recommended the use of ratio indicators of efficiency in reporting to external stakeholders. The purpose of this study was to determine whether ratio indicators of efficiency, similar to those recommended by the GASB, can adequately distinguish between relatively efficient and relatively inefficient school districts, in a manner consistent with a more sophisticated approach such as data envelopment analysis. In order to meet this objective, the relative efficiency of a number of school districts in western and central New York State was determined through data envelopment analysis (DEA) and compared to ratio measures of efficiency, similar to those recommended by the GASB.
LITERATURE REVIEW
This section examines recent demands for accountability in education, as well as the inherent difficulties of measuring educational efficiency using ratio and regression approaches. The relative advantages of data envelopment analysis are also examined.
Demands for Accountability in Education
The reports of the National Commission on Excellence in Education (1983, 1987), the Holmes Group (1986) and the Carnegie Forum on Education and the Economy (1986) are among those which have formed the basis of the reform movement in American education. These reports were symptomatic of increasing dissatisfaction with public education and have resulted from perceptions that schools are not doing an adequate job. At the same time, governments have been subjected to increasing pressure to be ever more vigilant in their stewardship of public...