A review of effective schools studies suggests that the research should continue but the methodology must change if the studies are to gain credibility. The first of this paper's three sections explains the educational production function in terms of the microeconomics of education. The measurement and classification of such function variables as output measures and the characteristics of students, schools, and homes are explained. The second section reviews relevant studies and focuses on the importance of socioeconomic status as a predictor of school achievement. Variations in production functions related to different types of schools are considered. The third section explores problems and issues related to studying productive and effective schools. Methodological weaknesses severely limiting the value of research are noted, with examples drawn from the literature. The paper concludes with suggestions for further research, particularly on the relationship between socioeconomic status and educational achievement. (PGD)