School externalities and scholastic performance: an efficiency analysis

Purpose: The purpose of this paper is to analyze the determinants of scholastic performance using an efficiency analysis perspective. Design/methodology/approach: The authors apply data envelopment analysis (DEA) at the pupil level using the 2009 PISA survey in Azerbaijan. Before applying DEA with multiple outputs, this paper integrates the maximum amount of available information on inputs via the use of correspondence analysis. Findings: The results show that scholastic efficiency depends positively on the externalities due to the resources of the school and to a peer effect. The analysis of the determinants of these externalities shows how they influence scholastic performance and has some policy implications. Practical implications: Education policies should promote the resource externality, because its effect is more homogeneous among pupils. The mechanisms generating school externalities should be taken into consideration by educational authorities, when allocating resources to school and should give some guidelines about how to use these resources and how to manage a school in order to promote peer effects externalities. Originality/value: The authors distinguish various sources of efficiency: that of the pupil and that due to school externalities operating via resources and peer effects. The authors relate the efficiency due to school externalities to individual, family and school characteristics.