Standard Costs for Italian Primary Schools: A Simulation Through a Cost Function Approach

Abstract

In Italy, the process of devolving more powers on educational matters to Regions and schools poses some relevant policy challenges, among which the necessity to determine “standard” costs for schools stands as a major priority. In this paper, we propose an approach based on cost functions through statistical techniques. We empirically estimate a cost function for a sample of 587 public primary schools in an Italian Region. On the basis of estimations, we simulate school-level standard costs, cost indexes, and discuss the potential reallocation of resources across schools; moreover, we also formulate hypotheses about the additional costs required to provide adequate educational standards in terms of achievement scores.

Keywords: Schools’ efficiency, schools’ performance, school funding

JEL Classification: I21, H52, I22, I28, H72