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Technical Efficiency in Education from Value-Added Measures

This paper presents a model to assess technical efficiency that incorporates value-added measures in schools as an output of the educational system. By using value-added measures, estimated from multilevel models, accurate, reliable and objective indices of the students’ progress over time can be obtained, isolating the effect of variables that influence the results achieved by schools, but outside the control of the education managers. The model proposed to measure efficiency is composed of two different steps: first the schools’ value added under nonlinear growth models is estimated and, then, the technical efficiency is calculated after incorporating value-added measures as indicators of their productivity. The objective of applying this model is to assess the technical efficiency of primary schools in the Madrid Region (Spain). In turn, the efficiency scores obtained here are compared with those resulting from applying other models in which efficiency levels are determined by pass rates or students overall performance at a given time, in other words, those in which outputs traditionally considered in efficiency studies conducted in non-university educational settings are introduced. In spite of there being some agreement among the estimates obtained by the different models, the differences found are statistically significant.