Public Education Cost Frontier Models: Theory and An Application

Authors

John E. Anderson, University of Nebraska-LincolnFollow
Mahbubul Kabir, Lyon CollegeFollow

Date of this Version

11-2000

Comments

Anderson, John E. and Kabir, Mahbubul M.,Public Education Cost Frontier Models: Theory And An Application(November 2000). Available at SSRN: http://ssrn.com/abstract=253865 or DOI: 10.2139/ssrn.253865. Used by permission.

Abstract

We examine the cost structure of public schools in this paper, using frontier cost models that enable us to estimate sources of inefficiency. A two equation stochastic frontier model is presented that can be used to explain both cost and the sources of inefficiency. Using that model and data for public schools in Nebraska over the period 1989-92, we estimate cost frontiers for the districts. Estimated cost frontier information is then used in estimating school district need for purposes of computing state aid, illustrating an important potential application of such information.