Interesting
From Phi Beta Cons (emphasis mine):
Profit-Seeking Benefits Educational Customers [Candace de Russy]
A study by the RAND Corp. early this year found no impact of private management on student performance.
In a new study, Paul Peterson and Mathew Chingo, researchers at Harvard’s Program on Education Policy and Governance, contradict this finding. Analyzing for-profit management in Philadelphia public schools, they conclude that “those who need to make a profit have strong incentives to do well by their customers” and that this approach succeeds well in educating students in even the most troubled of urban schools.
Chalk up yet another victory for Adam Smith.
From a rollup of that Peterson/ Chingo study from the Wall Street Journal:
When for-profit management of public schools was first proposed in Philadelphia six years ago, many in that city were extremely skeptical, if not aggressively hostile. So the Philadelphia School Reform Commission, the entity responsible for the innovation, gave only the 30 lowest performing schools to for-profit companies, while another 16 were given to nonprofit organizations, including two of the city's major universities (Temple and the University of Pennsylvania). Others were reorganized by the school district itself.
In effect, a competition was run among the three types of management -- for-profit, nonprofit, and government-run. Four years into the race, here are the results: Students at schools managed by for-profit firms were roughly six months ahead in math than would be expected had the schools remained in the hands of the school district. In reading, students in schools managed by for-profit firms were two months further along than they would have been if the schools had been under district control, though that difference was not large enough to give us statistical certainty. Meanwhile the nonprofits -- and the school district's own reorganized schools -- did no better than expected.
Our findings are based upon information gleaned from nearly 400,000 student test scores made available to us by the School District of Philadelphia. They gave us the test scores of every tested student for the years 2001 through 2006, allowing us to track student performance at for-profit, nonprofit and low-performing district schools both before and after the management changes took place.
That data was subjected to a rigorous, quasi-experimental, "difference in differences" analysis that estimates management impacts at each type of school by making use of information on how much students were learning both before and after the management change while controlling for the students' characteristics.
Competition in the private market almost always results in higher quality products at a lower cost. Couple that with complete transparency / information in the marketplace for both consumers and producers to research, contrast, and compare, and the results usually rewards those producers with the best products at the lowest costs.
That is, in optimal markets.
Unfortunately, the education marketplace currently (both in the monopoly part and the "fairly" unregulated portion) is not a perfect, or even close to optimal, marketplace.
