Measurement of productivity and quality in non‐marketable services: With application to schools

Abstract

Purpose

This paper seeks to model and compute productivity, including a measure of quality, of a service which does not have marketable outputs – namely public education at the micro level. This application is a case study for Sweden public schools.

Design/methodology/approach

A Malmquist productivity index is employed which allows for multiple outputs or outcomes such as test results and promotions without requiring price data with which to aggregate these outputs. It also allows one to account for inputs such as teachers and facilities as well as proxies for quality of the inputs (e.g. experience of teachers) and outputs. This model generalizes the basic data envelopment analysis (DEA) models – used successfully to measure performance in many educational applications – to the intertemporal case. A way of computing quality and quantity components of overall productivity is employed.

Findings

The case study is an application to the Swedish primary and secondary school system over the 1992 to 1995 period. It was found that quality “matters”, i.e. productivity growth changes when one accounts for quantity.

Research limitations/implications

The data available implied that the specification is restricted to an intermediate production model, i.e. the output data only account for the intermediate outcomes of education like grades and promotions, but not the longer term outcomes related to success in the job market or higher education, which one proposed as a task for future research.

Originality/value

The indices which are computed at the micro level are of value for policy purposes (does investment in quality matter?) and in an evaluation context.

Citation

Färe, R., Grosskopf, S., Forsund, F.R., Hayes, K. and Heshmati, A. (2006), "Measurement of productivity and quality in non‐marketable services: With application to schools", Quality Assurance in Education, Vol. 14 No. 1, pp. 21-36. https://doi.org/10.1108/09684880610643593