Disease or utopia? Testing Baumol in education

Xin Chen and Charles Moul

Economics Letters, 2014, vol. 122, issue 2, 220-223

Abstract: Baumol’s Cost Disease offers a compelling hypothesis of rising unit costs in stagnant sectors, but increased productivity in progressive sectors may generate the same prediction through income effects. We examine quantity (rather than expenditure) data from the U.S. educational sector to distinguish between these explanations. Our results indicate significant negative impacts of manufacturing productivity on teacher–pupil ratios.

Keywords: Education costs; Baumol cost disease; Teacher–pupil ratios (search for similar items in EconPapers)
JEL-codes: I20 O40 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:122:y:2014:i:2:p:220-223

DOI: 10.1016/j.econlet.2013.11.032

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