Do charter schools spur improved efficiency in traditional public schools in Michigan?

This article evaluates the competitive effect of charter schools on hosting school districts, using Data Envelopment Analysis and a regression model. The empirical work is based on Michigan, using district­level school finance and Michigan Educational Assessment Program score data. The results of our analysis show that charter hosting districts improved their efficiency score, as measured by DEA, more than other school districts. However, this difference in efficiency score is not statistically significant. Further analysis using first­differencing regression also confirms that the change in efficiency noted in charter­hosting districts is not affected to a statistically significant degree by the share of local charter school enrollment. This implies that the existence of charter schools does not in and of itself automatically improve the efficiency of traditional public schools.