Using a DEA Management Tool through a Nonparametric Approach: An Examination of Urban-Rural Effects on Thai School Efficiency

Abstract

This paper examines urban-rural effects on public upper-secondary school efficiency in northern Thailand. In the study, efficiency was measured by a nonparametric technique, data envelopment analysis (DEA). Urban-rural effects were examined through a Mann-Whitney nonparametric statistical test. Results indicate that urban schools appear to have access to and practice different production technologies than rural schools, and rural institutions appear to operate less efficiently than their urban counterparts. In addition, a sensitivity analysis, conducted to ascertain the robustness of the analytical framework, revealed the stability of urban-rural effects on school efficiency. Policy to improve school efficiency should thus take varying geographical area differences into account, viewing rural and urban schools as different from one another. Moreover, policymakers might consider shifting existing resources from urban schools to rural schools, provided that the increase in overall rural efficiency would be greater than the decrease, if any, in the city. Future research directions are discussed.