The Demand for Education and the Production of Local Public Goods
Improving the educational outcomes which schools achieve in the primary and secondary education sectors has become a central public policy goal, to which large sums of public money have been devoted. Being able to estimate the educational production function between pupil educational achievements, resource inputs and characteristics of the pupil intake in an unbiased way can help progress both ex ante policy formation and ex post effectiveness monitoring. Such an unbiased estimation requires recognition of not only the supply-side concept of the educational production function but also several demand-side relationships affecting the demand for school places, the socio-economic characteristics of a school’s pupil intake, the quality of teaching staff a school can recruit, and the determination of local property prices. Failure to recognise these additional inter-relationships through the use of standard single-equation Ordinary Least Squares multivariate regression will result in multiple sources of cumulative downward bias in the estimated importance of resource variables in influencing pupil educational outcomes, in ways which are analysed in this paper. The analysis of this paper calls into question the conclusions drawn by Hanushek and others, from many of the earlier statistical studies of the educational production function, of there existing no substantial link between educational resourcing and educational outcomes.
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- Eric A. Hanushek, 1979. "Conceptual and Empirical Issues in the Estimation of Educational Production Functions," Journal of Human Resources, University of Wisconsin Press, vol. 14(3), pages 351-388.
- David Mayston, . "Educational Attainment and Resource Use: Mystery or Econometric Misspecification," Discussion Papers 96/17, Department of Economics, University of York.
- Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
- Forsund, Finn R. & Lovell, C. A. Knox & Schmidt, Peter, 1980. "A survey of frontier production functions and of their relationship to efficiency measurement," Journal of Econometrics, Elsevier, vol. 13(1), pages 5-25, May.
- David Mayston, . "Accounting, Information and the Development of Evidence-Based Resourcing Strategies in Education," Discussion Papers 00/47, Department of Economics, University of York.
- David Mayston, . "Performance Management and Performance Measurement in the Education Sector," Discussion Papers 00/40, Department of Economics, University of York.
- Hanushek, Eric A, 1986. "The Economics of Schooling: Production and Efficiency in Public Schools," Journal of Economic Literature, American Economic Association, vol. 24(3), pages 1141-77, September.
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