This monograph identifies appropriate quantitative indicators of educational effectiveness and efficiency, and discusses how such indicators should be used to assess education at multiple levels of the system. It focuses on the practical aspects of introducing effectiveness and efficiency concepts/measures into the deliberations of educational practitioners. The first part deals with the conceptual and definitional issues related to the measurement of education effectiveness and efficiency. It reviews the appropriateness of the application of the efficiency model to education and proposes specific definitions for common terms. The second part involves indicators of educational effectiveness--the first chapter with input and process measures, and the second with output and outcome measures. The role of qualitative indicators is also discussed. The third part reviews basic cost issues and demonstrates how efficiency analysis is conducted under four alternative forms: benefit-cost, cost-effectiveness, least-cost, and cost-utility analyses. Part 4 assesses the policy relevance of indicators as they relate to the development and use of educational management information systems. It concludes with a brief review and set of recommendations to improve the practical relevance of efficiency considerations to educational systems and institutions. Thirteen tables, four figures, and an extensive bibliography are included. (LMI)