For some reason, and I have no idea why, I spent some time today thinking about the implications of privatizing the education system (by privatizing the education system, I mean totally eliminating the role of the federal, state, and local governments in K-12 and university level education and leaving education to be sorted out by the "market forces"). This is not something that I have given much thought to before, so I apologize if my thoughts seem a bit simplistic. I assume based on no metric (other than intuition) that the current status quo has government (at all levels) more involved in K-12 education than in unversity level education (in the U.S.) My initial thoughts...

Clearly the average quality of education at the K-12 level in the U.S. leaves much to be desired. Ardent supporters of privitization would argue that if education was left up to the "market," then the quality of education would improve (perhaps dramatically). Implicitly I suppose they mean that, if left up to the market, the quality of education would improve on average. I wonder though what would happen to the variance (i.e., the spread) of education quality? What would happen to the gap between the average quality of education and the median quality of education?

At this point I would be willing to concede that the average quality of education might increase, but I am almost certain that the variance/spread of education quality would increase substantially if the education system were privatized. I would also be willing to bet that the gap between the average quality of education and the median quality of education would increase substantially.

For a more concrete example, think of the wealth distribution in the U.S. The average income is very high, but the disribution is also highly skewed (i.e. unequal, average income is higher than median income, etc). The distribution of income is a particular stark example of a skewed disribution. But it is also an example of a distribution whose shape is determined by "market forces" and if we are going to ration education by ability to pay (i.e., by the market...and note that I did not say willingness to pay...in the real world willingness to pay and ability to pay are NOT the same thing) then the shape of the income distribution would seem to be relevant.

I haven't yet touched on issues related to market competition. Advocates of privitization frequently argue that privitizing the education system would allow "market forces" to bid the price of education down. The problem is that in no way, shape, or form would there exist anything approach perfect competition in the market for education. At a minimum, options for K-12 education would still be significantly constrained by the physical residence of the parents. I will try to elaborate on competition related issues in a follow-up post...

## Blog Topics...

3D plotting
(1)
Academic Life
(2)
ACE
(18)
Adaptive Behavior
(2)
Agglomeration
(1)
Aggregation Problems
(1)
Asset Pricing
(1)
Asymmetric Information
(2)
Behavioral Economics
(1)
Breakfast
(4)
Business Cycles
(8)
Business Theory
(4)
China
(1)
Cities
(2)
Clustering
(1)
Collective Intelligence
(1)
Community Structure
(1)
Complex Systems
(42)
Computational Complexity
(1)
Consumption
(1)
Contracting
(1)
Credit constraints
(1)
Credit Cycles
(6)
Daydreaming
(2)
Decision Making
(1)
Deflation
(1)
Diffusion
(2)
Disequilibrium Dynamics
(6)
DSGE
(3)
Dynamic Programming
(6)
Dynamical Systems
(9)
Econometrics
(2)
Economic Growth
(5)
Economic Policy
(5)
Economic Theory
(1)
Education
(4)
Emacs
(1)
Ergodic Theory
(6)
Euro Zone
(1)
Evolutionary Biology
(1)
EVT
(1)
Externalities
(1)
Finance
(29)
Fitness
(6)
Game Theory
(3)
General Equilibrium
(8)
Geopolitics
(1)
GitHub
(1)
Graph of the Day
(11)
Greatest Hits
(1)
Healthcare Economics
(1)
Heterogenous Agent Models
(2)
Heteroskedasticity
(1)
HFT
(1)
Housing Market
(2)
Income Inequality
(2)
Inflation
(2)
Institutions
(2)
Interesting reading material
(2)
IPython
(1)
IS-LM
(1)
Jerusalem
(7)
Keynes
(1)
Kronecker Graphs
(3)
Krussel-Smith
(1)
Labor Economics
(1)
Leverage
(2)
Liquidity
(11)
Logistics
(6)
Lucas Critique
(2)
Machine Learning
(2)
Macroeconomics
(45)
Macroprudential Regulation
(1)
Mathematics
(23)
matplotlib
(10)
Mayavi
(1)
Micro-foundations
(10)
Microeconomic of Banking
(1)
Modeling
(8)
Monetary Policy
(4)
Mountaineering
(9)
MSD
(1)
My Daily Show
(3)
NASA
(1)
Networks
(46)
Non-parametric Estimation
(5)
NumPy
(2)
Old Jaffa
(9)
Online Gaming
(1)
Optimal Growth
(1)
Oxford
(4)
Pakistan
(1)
Pandas
(8)
Penn World Tables
(1)
Physics
(2)
Pigouvian taxes
(1)
Politics
(6)
Power Laws
(10)
Prediction Markets
(1)
Prices
(3)
Prisoner's Dilemma
(2)
Producer Theory
(2)
Python
(29)
Quant
(4)
Quote of the Day
(21)
Ramsey model
(1)
Rational Expectations
(1)
RBC Models
(2)
Research Agenda
(36)
Santa Fe
(6)
SciPy
(1)
Shakshuka
(1)
Shiller
(1)
Social Dynamics
(1)
St. Andrews
(1)
Statistics
(1)
Stocks
(2)
Sugarscape
(2)
Summer Plans
(2)
Systemic Risk
(13)
Teaching
(16)
Theory of the Firm
(4)
Trade
(4)
Travel
(3)
Unemployment
(9)
Value iteration
(2)
Visualizations
(1)
wbdata
(2)
Web 2.0
(1)
Yale
(1)

## No comments:

## Post a Comment