Page 176 - DEDU503_EDUCATIONAL_MANAGEMENT_ENGLISH

Educational Management

Notes However, these buildings or land may have alternative uses and the decision to build a school may
mean the sacrifice of an opportunity to build a hospital or community development centre. For
budgetary purposes, donated land may be ignored, but for purposes of a cost-benefit calculation,
which attempts to evaluate the profitability of one particular form of investment in comparison with
alternative investments, it is essential that the sacrifice of alternative opportunities to use land or
buildings be counted as part of the real cost of the investment.
Thus, the measurement of the costs of education, for the purposes of cost-benefit analysis, involves
more than a simple calculation of money expenditures. It also involves an attempt to estimate the
total cost of investment in education in terms of alternative opportunities foregone either by society
as a whole or by the private individual.

Social and Private Costs
If the purpose of the cost-benefit analysis is to evaluate education as a form of social investment, the
relevant cost concept is the total resource cost of education to the economy (social costs). This includes
the value of teachers’ time, books, materials and other goods or services, the value of the use of
buildings and capital equipment, and finally the value of students’ time, measured in terms of
alternative uses.
The simplest measure of the value of teachers’ time is expenditure on salaries. If, however, for some
reason teachers are paid less than the current market rate for their services, some attempt must be
made to estimate the true opportunity cost of their time. For example, in some developing countries
teachers give some of their free time to conducting adult literacy classes (without payment). If this
time would otherwise be unoccupied, there is no opportunity cost to be measured; but if the time
could otherwise be devoted to some form of community development work, then the time does
have an alternative use and is not strictly a ‘free’ good. Similarly, if teachers are required by law to
serve for a year at reduced rates of pay as a form of ‘national service’, the value of their time should
be measured by market rates rather than by their actual salaries.
The value of books, stationery and writing materials can also be measured in terms of money
expenditure.
Self Assessment
1. Fill in the blanks :
(i) Cost benefit analysis is ______ of the magnitude of costs and benefits of a form of investment
in order to assess its economic profitability.
(ii) The purpose of the cost benefit analysis is to provide ______ of the expected yield of the
investment as a guide to rational allocation of resources.
(iii) If the purpose of the ______ is to evaluate education as a form of social investment, the
relevant cost concept is the total resource cost of education.
(iv) The simplest measure of the value of teacher’s time is expenditure on ______.
Cost-effectiveness Analysis

Cost-effectiveness analysis refers to the consideration of decision alternatives in which both their
costs and consequences are taken into account in a systematic way. It is a decision oriented tool, in
that it is designed to ascertain which means of attaining particular educational goals are most
efficient. For example, there are many alternative approaches for pursuing such goals as raising
reading or mathematics achievement. These include the adoption of new materials or curriculum,
teacher training, educational television, computer-assisted instruction, smaller class sizes, and so
on. The cost-effective solution to this challenge is to ascertain the costs and effects on reading or
mathematics achievement of each alternative and to choose that alternative which has the greatest
impact on raising achievement scores for any given resource outlay.

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