Small is not that beautiful after all: measuring the scale efficiency of Tunisian high schools using a DEA-bootstrap method

Abstract

Allocation of resources to schools in a centrally managed state system, as the Tunisian one, should depend on the performance of the individual institutions. The optimal size is of crucial importance in this context and we need accurate measurement for sound policies. This article discusses and implements a nonparametric statistical test procedure for organization scale efficiency. This procedure allows us to test whether the observed scale efficiency is optimal or not, using a smooth bootstrap methodology for efficiency measures estimated using Data Envelopment Analysis (DEA) methods. Because school principals do not control for the size of their institution, i.e. the capital available at decision time, the scale efficiency measures are defined so as to include quasi-fixed inputs. The results show that scale efficiency measures are subject to sampling variation. We also found that the schools that are scale efficient are usually mid-sized and large schools, when size is measured by the number of students. This contradicts the largely shared view among decision makers that small schools were optimal.