Accounting, Information and the Development of Evidence-Based Resourcing Strategies in Education

In this paper we will argue that there has developed a significant gap between the high policy priority given to improving educational performance in the UK and the attention that has effectively been given to generating the information base upon which more effective educational resourcing strategies might be developed. This is despite the fact that evidence-based policies are intended to be at the heart of the current Modernising Government initiative. The high priority given to education by the incoming new Labour Government and by the Prime Minister in 1997 has since been accompanied by substantial additional resources under the Comprehensive Spending Reviews of 1998 and 2000. The principle of devolving educational budgets and resource management decisions down to individual schools through formula funding, that was at the centre of the previous government’s Local Management of School initiative, has also been reinforced. However, there remain important questions of the nature of the links which exist between school resourcing, characteristics of the pupil, and the educational achievements which can be expected from these different pupil and resource inputs. These questions are important for both the design of improved resource allocation formulae to allocate educational resources to individual schools and for resource management decisions within schools, as well as for target setting and performance monitoring. Answering these questions requires the development of a comprehensive national comparative school database, of which improvements in financial reporting would form a key component.educational resourcing; educational performance; resource management.

Structural Determinants of Cumulative Endogeneity Bias

The BLU properties of OLS estimators under known assumptions have encouraged the widespread use of OLS multivariate regression analysis in many empirical studies that are based upon a conceptual model of a single explanatory equation. However, such a model may well be an imperfect empirical approximation to the valid underlying conceptual model, that may well contain several important additional interrelationships between the relevant variables. In this paper, we examine the conditions under which we can predict the direction of the resultant endogeneity bias that will prevail in the OLS asymptotic parameter estimates for any given endogenous or predetermined variable, and the extent to which we can rely upon simple heuristics in this process. We also identify the underlying structural parameters to which the magnitude of the endogeneity bias is sensitive. The importance of such sensitivity analysis has been underlined by an increasing awareness of the inability of standard diagnostic tests to shed light upon the extent of the endogeneity bias, rather than upon merely its existence. The paper examines the implications of the analysis for statistical inferences about the true value of the regression coefficients and the validity of associated t-statistics.Multivariate regression analysis; Cumulative endogeneity bias; Evidence-based policy

Analysing the Research and Teaching Quality Achievement Frontier

The paper analyses the nature of the achievement possibility frontier between research and teaching quality in higher education under a system of quality evaluation by reference to discrete quality grades. It finds several important reasons why the associated feasible set is likely to be non-convex, and hence where the assumptions of the widely used nonparametric frontier performance analysis technique of Data Envelopment Analysis are no longer valid. The paper therefore investigates the use of the alternative Free Disposal Hull technique, and compares the results of deploying these techniques to the performance evaluation of UK Departments of Economics.Research and teaching quality, Higher education, Departments of Economics, Data Envelopment Analysis (DEA), Free Disposal Hull

Performance Management and Performance Measurement in the Education Sector

The paper examines several outstanding issues on the interface between the measurement of performance in primary and secondary education and the management of improved performance in this nationally important sector. These issues relate to the clarification of the objectives of the education system, the impact of performance reward systems, such as Performance Related Pay, t he role of resources in influencing educational outcomes, the reliability of existing methods of assessing educational performance, such as Data Envelopment Analysis and multivariate regression, and the need for an improved national comparative database if progress is to be made in several of these directions.Performance management; performance measurement; education; data envelopment analysis; quality control; knowledge management.

The Optimal Duration of Equity Joint Ventures

Whilst joint ventures offer a potentially attractive form of corporate and industrial organisation, they also experience high rate of break-up within ten years from their initial formation. In this paper, we model this process not as an uncertain random event, but rather as the predictable outcome of underlying economic variables, with break-up within a finite time resulting even under conditions of complete certainty. Given the prevalence of joint venture break-ups, it is in the interests of both partners in an equity joint venture to be fully aware of their own optimal durations of the joint venture in their initial negotiations for the formation of the equity joint venture. Where the underlying economic parameters imply differences in their individual optimal durations of the joint venture, there is therefore scope for mutually beneficial agreements on a binding date for the break-up of the joint venture, and for side payments to enable this binding agreement to be reached, either as cash payments or in terms of their relative shareholdings in the jointly-owned separate company that will manage the equity joint venture. In addition, there is scope for a differential corporate tax rate on the joint venture, compared to that on the go-it-alone businesses of the two partners, in order bring the two partners’ privately optimal durations into line with the socially optimal duration of the joint venture.Joint ventures, equity shareholdings, optimal duration, corporate tax rates.

Developing a Framework Theory for Assessing the Benefits of Careers Guidance.

Public expenditure decisions increasingly require demonstratable benefits from each area of expenditure. At the same time, investment in human capital represents a form of investment in which individuals typically bear considerable specific, as well as systematic, risks regarding future returns on their investment. This paper develops a framework in which the social benefits of increased expenditure on careers guidance can be assessed using the tools of economic analysis and decision theory. After examining these benefits from the viewpoint of risk management, the paper examines the quality of life measurement issues which are raised by career choice. It concludes with an examination of the wider social and macroeconomic benefits from improved labour market flexibility that investment in careers guidance may achieve.

The Economic Determinants of Health Inequalities

It has been argued by several commentators (e.g. Wilkinson, Evans) that psycho-social stress associated with an individual’s relative position in the social and economic hierarchy is a predominant determinant of their health status, with an individual’s absolute level of income of lesser importance. In this paper, we argue that the concentration on psycho-social stress as the primary pathway for health determination neglects a number of important economic pathways for the impact of relative income on health. These economic pathways include firstly the impact on health of positional goods, whose absolute level of consumption is a function of the relative position of an individual in the distribution of income and wealth. One key positional good is that of land, whose consumption level has important health-determining correlates, such as overcrowding, sanitation needs, commuting stress, pollution levels, and mortgage pressures. The second economic pathway involves changes in relative prices associated with rising absolute incomes, which interact with different price and income elasticities for different commodities that possess different health-inducing characteristics, to produce a pattern of health inequalities within and across countries, as a function of relative and absolute income levels, that is similar to that observed. The third economic pathway examined is that of the hysteresis effect of past economic stresses on the current state of individual human capital and relative competitiveness and their associated health levels. Each of these economic pathways is examined, and their importance analysed, in the context of both the Aboriginal population of Australia and inner city areas in the UK, and their associated major health inequalities.

Data Envelopment Analysis, Endogeneity and the Quality Frontier for Public Services

Applying Data Envelopment Analysis (DEA) to real-world public policy issues can raise many interesting complications beyond those considered in standard models of DEA. One of these complications arises if the funding levels of public service providers, and their ability to attract and retain clients and able staff, depend upon the quality of the output which they produce. This dependency introduces additional inter-relationships between inputs and outputs beyond the uni-directional Production Possibility Frontier (PPF) relationship considered by standard DEA models. The paper therefore analyses the multiplier effects which can be generated by these additional relationships, in which key resource inputs become endogenous variables subject to the external environmental variables which the public service provider faces across these different relationships. The magnitude of these multiplier effects can be captured by focusing DEA on the estimation of an Achievement Possibility Frontier, which reveals the wider set of opportunities which are available to a public service provider to improve its own output quality than that revealed by the estimation of the PPF associated with standard models of DEA. In doing so, the paper enables DEA to be still applied, but in modified form, to the estimation of the scope for improved output of any given public service provider in the presence of such resource endogeneity

Convexity, quality and efficiency in education

While Data Envelopment Analysis has many attractions as a technique for analysing the efficiency of educational organisations, such as schools and universities, care must be taken in its use whenever its assumption of convexity of the prevailing technology and associated production possibility set may not hold. In particular, if the convexity assumption does not hold, DEA may overstate the scope for improvements in technical efficiency through proportional increases in all educational outputs and understate the importance of improvements in allocative efficiency from changing the educational output mix. The paper therefore examines conditions under which the convexity assumption is not guaranteed, particularly when the performance evaluation includes measures related to the assessed quality of the educational outputs. Under such conditions, there is a need to deploy other educational efficiency tools, including an alternative non-parametric output-orientated technique and a more explicit valuation function for educational outputs, in order to estimate the shape of the efficiency frontier and both technical and allocative efficiency