IPR Research Notes

Performance Measurement in Schools

Fall 2009 , Volume 31, Number 1

David Figlio

In nonprofit work from education to medical care, private and governmental organizations are facing increased scrutiny over the efficiency of their operations. Reliable measures of their performance are hard to come by, but even when available, the question remains of when and how the organizations’ stakeholders actually use such information.

In an IPR working paper now published in the Journal of Public Economics, IPR education economist David Figlio and Lawrence Kenny of the University of Florida provide the first analysis of stakeholder behavior in the education sector with a look at Florida public school ratings and their impact on the receipt of donations.

In 2002, Florida changed its ratings system, which grades schools A to F based heavily on student performance on state tests. The researchers compared each school’s grade with its reported receipt of donations, using three waves of survey data from the 1999–2000, 2001–02, and 2003–04 academic years.

“Receiving a high grade does not generally increase voluntary contributions to a school, but receiving a low grade reduces a school’s private financial support,” Figlio said.

The finding that less money is contributed to poorly run schools is consistent with existing evidence that “donors are reluctant to throw good money at inefficient organizations,” Figlio said. Yet school grades affected donations to different schools in different ways.

For example, parents of gifted students are more likely to monitor school performance on their own—and are therefore less likely to rely on external measures like the state ratings system.  As a result, low grades had little effect on schools that serve relatively large numbers of gifted students.

On the other hand, donations to schools serving poor or minority families were especially sensitive to the school grade. These schools saw the largest reductions in private financial support after receiving an “F” grade, but they also saw larger gains when their grades improved. Where high achievement and improvement were least expected—in schools with large numbers of disadvantaged students—a grade bump was likely to spur a significant boost in donations.

Figlio said this last finding especially supports the notion that accountability systems can improve school performance, as it reveals the biggest incentives for the worst performing and most disadvantaged schools.

For more information about these and other IPR research projects, please visit www.northwestern.edu/ipr/.