A Unified Productivity-Performance Approach Applied to Secondary Schools

We introduce a novel and simple diagnostic tool to improve the performance of public services
(e.g. in health, education, utilities and transportation). We propose a method to compute perfor-
mance/productivity ratios, which can be applied as soon as data on production units outcomes
and resources are available. These ratios have an intuitive interpretation: values below unity
indicate that better outcomes can be attained through weaker resource constraints (pointing at
scarcity of resources) and, conversely, values above unity indicate that better outcomes can be
achieved with the given resources (pointing at unexploited production capacity). We demonstrate
the practical usefulness of our methodology through an application to secondary schools in the
Netherlands. In this application, we also account for outlier behavior and environmental e¤ects
by using a robust nonparametric estimation method. Our empirical results indicate that in most
cases schools performance improvement is a matter of unexploited production capacity, while
scarcity of resources is a lesser issue.