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Public Versus Private Production. A Study of the Cost of School Cleaning in Denmark

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Author Info
Henrik Christoffersen
Martin Paldam
Allan Würtz () (Department of Economics, University of Aarhus, Denmark)

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Abstract

The cleaning of Danish schools is produced by one of three forms of organization: decentral municipal, central municipal or private. The cost function is shown to be well estimated by a trans-log specification of scale and quality of cleaning. For small schools the organization makes little difference. For larger schools decentral municipal production is the most expensive. On average centralization reduces costs by 6%, while privatization reduces costs by 29%. These cost gaps are due to the difference in ability to exploit the economy of scale.

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Publisher Info
Paper provided by School of Economics and Management, University of Aarhus in its series Economics Working Papers with number 1999-22.

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Handle: RePEc:aah:aarhec:1999-22

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Related research
Keywords: Cost function; public production; private production; scale effects; non- parametric regression; bootstrap;

Find related papers by JEL classification:
C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods
D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Boundaries of Public and Private Enterprise; Privatization; Contracting Out

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