A large scale study was undertaken to shed light on the question of school district efficiency, that is, the extent to which school districts are able to increase achievement beyond what would be expected from their families socioeconomic origins. Average scores on state-developed and nationally-standardized tests of third, sixth, and ninth graders in New Jersey districts were regressed on indexes of district socioeconomic status (SES), per-student expenditures, and district enrollment. The numbers of districts entering the analyses, depending on grade level and test, varied from 261 to 507. Average student test scores were significantly associated with the SES of the districts. Higher SES districts, as expected, achieved more than lower SES districts. Per-student expenditures on education were insignificantly associated with achievement test scores, so that low spending districts on average achieved as efficiently as high spending districts. A consistent trend was found for larger districts to achieve less efficiently than smaller districts. In general, the smaller the district, the higher achievement when SES and per-student expenditures were taken into account. These results call into question the practice of school district consolidation and suggest that educational policies and practices, not expenditures, offer the best chance of improving efficiency. (JHZ)