Nonparametric Estimation of the Cost of Adequacy in Education: The Case of Dutch Schools

Adequacy is defined in education as a minimum set of outcome standards. Schools that are unable to achieve these goals are not providing an adequate education. This failure could arise from insufficient spending on productive resources and/or inefficient use of existing resources. The purpose of this paper is to build on previous research to provide estimates of the cost of adequacy. We introduce a non-parametric measure of the cost of adequacy that controls for the socio-economic environment and resource prices. For illustrative purposes, we apply this model to analyse Dutch schools. Our results show that the costs of achieving the minimum standard of performance are very different for schools with different levels of environmental harshness. Furthermore, the additional costs of achieving a higher standard are much higher for schools with a harsh environment than for schools with a favourable environment.