A Unified Productivity-Performance Approach, with an Application to Secondary Schools in the Netherlands

27 Pages Posted: 10 Oct 2015

See all articles by L. Cherchye

L. Cherchye

KU Leuven; Erasmus Research Institute of Management (ERIM)

K. De Witte

University of Leuven (KUL); Maastricht University

Sergio Perelman

University of Liège - Department of Economics

Date Written: October 2, 2015

Abstract

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 performance/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 effects 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.

Keywords: performance, productivity, resource constraints, secondary schools

Suggested Citation

Cherchye, Laurens and De Witte, Kristof and Perelman, Sergio, A Unified Productivity-Performance Approach, with an Application to Secondary Schools in the Netherlands (October 2, 2015). Available at SSRN: https://ssrn.com/abstract=2671761 or http://dx.doi.org/10.2139/ssrn.2671761

Laurens Cherchye (Contact Author)

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant
Belgium

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Kristof De Witte

University of Leuven (KUL) ( email )

Naamsestraat 69
Leuven, Vlaams Brabant B-3000
Belgium

HOME PAGE: http://www.feb.kuleuven.be

Maastricht University ( email )

Boschstraat 24
Maastricht, Vlaams-Brabant 6211 AX
Netherlands
003216326656 (Phone)

HOME PAGE: http://www.feb.kuleuven.be

Sergio Perelman

University of Liège - Department of Economics ( email )

7 Boulevard du Rectorat
Batiment B31
4000 Liege
Belgium
+32 4 156 3098 (Phone)
+32 4 156 2958 (Fax)

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