Estimations of educational production functions and technical efficiency of public primary schools in Tasmania

The study here examines the performance of Tasmanian public primary schools over the period of 2000 to 2007. The three principal objectives of the study are (i) to investigate the effects of school resources on students' academic achievement; (ii) evaluate schools' technical efficiency; and (iii) to identify the factors that affect the schools' technical efficiency. To explore the first objective, an educational production function is estimated. The second and the third objectives are examined by employing two techniques, namely, Stochastic Production Frontier (SPF) and Data Envelopment Analysis (DEA). On the basis of the estimation of a Fixed Effects model of a Tasmanian educational production function, a one per cent increase in educational expenditure per student is associated with an increase in the reading, writing and numeracy scores of 0.38%, 0.36% and 0.43%, ceteris paribus. Male students' performance was on average lower than female students. Evidence of relatively lower performance by indigenous students was found. Students' performance was also negatively affected by their level of absenteeism. Positive effects of parental education on Tasmanian students' academic achievement were found but the effects of parental occupation were not statistically significant. The SPF estimates suggest that Tasmanian public primary schools are almost technically efficient with the average technical efficiency score constant at 97% from 2003 to 2007. No technical efficiency change in the public primary educational sector in Tasmania over the period could be detected. The schools' technical inefficiency scores iii were positively associated with students' suspension rates. Mothers' occupational status had a significant negative effect on technical inefficiency. The average technical efficiency obtained under the DEA (assuming variable returns to scale) was constant at 95% over the study period (implying no technical efficiency change). On the basis of Tobit regression results, positive effects of parental occupation on technical efficiency were also found. The number of Aboriginal and Torres Strait Islander students; students who had English as a second language; the number of disability students; students' absenteeism rate and that a school was classified as rural all had a negative effect on technical efficiency. Urban schools were found to be more scale efficient than rural schools. Lower scale efficiency for rural schools was due to non-optimal school size (due to remote location and low population density). The efficiency rankings of schools based on the SPF and DEA methods vary due to (i) the different ways the SPF and DEA discriminate between schools in the construction of the production frontiers, and (ii) the different methodologies SPF and DEA apply to control for environmental factors.