This report examines the extent to which the Texas education system is efficient. It emphasizes x-efficiency, a more extensive concept than productive efficiency that includes incentives, information, and adaptability. Applying the concept of x-efficiency, the authors argue that in key areas—teacher training, teacher evaluation, teacher pay-setting, and use of instructional materials—the Texas education system is unlikely to be efficient or cannot demonstrate efficiency. However, because x-efficiency is a more comprehensive concept it requires more evidence and analysis in order to draw conclusions. As the evidence and analysis presented by the authors is insufficient, it cannot be determined whether the Texas education system is x-efficient or x-inefficient. Thus, the authors have in no way proved that the Texas education system is inefficient. That would require a more comprehensive and rigorous analysis than is provided here. Either way, such a determination is academic if there are no alternative ways to make the system more efficient. This report does not provide any alternatives. Its usefulness for policymakers and education professionals is therefore limited to the prescription that x-efficiency is important and should be addressed more rigorously.
George W. Bush Institute