Measuring the Cost of Meeting Minimum Educational Standards: An Application of Data Envelopment Analysis

The recent court decision in Ohio requires that school districts spend a sufficient amount to insure that students are able to meet outcome objectives. Determination of adequate spending is complicated by the influence that fixed socioeconomic factors have on outcome provision; adequate spending will vary depending on the harshness of the environment. Furthermore, measures of adequacy should account for inefficiency in educational production. In this paper, data envelopment is applied to analyze efficiency, costs and adequacy of 607 Ohio school districts using school year 2000 data. The results indicate that adequacy standards can be met by improving the performance of inefficient school districts and reallocating existing resources without increasing total expenditures.