Comparisons between unweighted and weighted indexes were undertaken to assess the impact of the application of cost weights. Given that cost shares at various levels of disaggregation in the input data sets are largely time invariant, no noticeable differences were observed between the two sets of indexes. However, by way of future proofing, it is recommended that weighted indexes be employed to measure changes in volumes of education output.
Figure 4 compares the aggregate cost-weighted volume index for primary and secondary school education to an ‘unweighted’ index of student enrolments (on an FTE basis) for those school levels. The unweighted indexes are compiled using the same FTE data as the cost-weighted indexes. Should there be sudden changes in costs in the lower level aggregates, or significant compositional change due to policy or demographic shifts, a cost-weighted volume index would reflect these events whereas an unweighted index would not.
Figure 4: Overall Australian School education indexes
Figure 5 shows a disaggregation of the weighted index in Figure 4 into indexes for public schools and private schools. The output of private school education has grown slightly faster than public school output over the time span. The private primary and secondary school series show some divergence from 2014-15 onwards. This is likely to be the combined effect of at least two factors. First, the proportion of students in secondary school rose over this period due to the reclassification of Year 7 from primary to secondary school in Queensland and Western Australia; this was more pronounced in private schools. Second, unit costs for secondary education are generally higher than those for primary education (and more so for private schools). This implies that the increase in average costs per student resulting from the reclassification was greater in the private school system, which resulted in the divergence between the weighted and unweighted series in Figure 5. Similar patterns are not as easily observed in the public schools indexes as total enrolments are much larger in comparison to the number of reclassified students.
Figure 5 also demonstrates the potential for the subtler compositional changes to be captured by the application of cost weights to more highly disaggregated data.
Figure 5: Public and private school education indexes
Figure 6 shows a disaggregation of the volume indexes in Figure 5 into primary and secondary education services. As mentioned earlier in the paper, Year 7 education in Queensland and Western Australia was reclassified from primary to secondary school education in 2015, which creates a compositional shift in the indexes. The sharp turning points in the primary and secondary (weighted and unweighted) indexes in 2014-15 and 2015-16 relate to these reclassifications.14
While these indexes have the ability to pick up quality changes associated with such reclassifications, the use of ‘ideal’ product (year level) data, as described earlier in this paper, could result in indexes which are more robust to the reclassification of year groups into primary or secondary streams.
Figure 6: Affiliation by school level indexes
The layers of stratification used to construct the experimental indexes make it possible to generate indexes for each state/territory. The generation of state indexes presents potential for future enhancements to volume estimates in the State Accounts (cat. no. 5220.0).
14 Note: The reclassification mainly occurred in calendar year 2015, but on a financial year basis the impact spreads over two consecutive years.