Planning Educational Services

A school system can be visualized as a firm utilizing capital and labor to produce its output. It must compete with other firms in purchasing its inputs. It is broadly concerned with efficient use of resources to produce its product. However, there is no well-defined product nor a price that can be attached to its product, and most of its product is not directly sold. Users (students) exert little pressure to increase efficiency, not only because they lack mature judgment and are unaware of input-output relationships (often inputs as well as outputs are ill-defined and uncertain), but also because efficiency gains are not passed to users. Furthermore, factors outside the school system influence output throughout the long production process. Even if the price mechanism does not work, economic principles can still be used in education to improve decision making.