A Work Project, presented as part of the requirements for the Award of a Masters Degree in Economics from the NOVA – School of Business and EconomicsThe typical indicator used to assess school performance is average test score results. Literature has pointed out serious weaknesses of this measure as a school performance indicator. The strongest criticism resides in the bias that may exist in socially disadvantaged schools. In fact, this measure does not take into account socioeconomic and other variables which are relevant in determining student‟s school performance and out of the scope of school control. Using school level cross-section data from Portugal for 9th grade exams between 2005 and 2010, I have explicitly calculated the impact of these variables on school achievement as regards exams. I found an important causal effect between socioeconomic variables and school achievement. This implies that average test scores are an intrinsically flawed instrument. For this reason, this study proposes an adjusted measure of school performance. This measure consists of a ratio between current average school scores and expected average school scores, taking into account the reference variables by municipality
