Sunday, October 10, 2010

Is the most expenisve public school in the country Pareto Efficent?

This August in a Yahoo News Article, Los Angeles unveiled the most expensive public school in the nation with a price tag of 578 million dollars. The school will house 4,200 students, so that is $137,619.05 dollars per student! The school called the Robert F. Kennedy Community School is built on the same land as the former Ambassador Hotel, where the Robert F. Kennedy was assassinated in 1968. This is the state's third of these "Taj Mahal Schools" which boast price tags of over $100 million dollars. Not everyone is celebrating these schools though. "The buildings are nice but they are a big waste of tax payers money and run by the same people who have given the city a 50 percent dropout rate." says Ben Austin who holds a seat on the California Board of Education. Parents are not fooled either. So while these schools may have all the latest amenities, they are not guaranteeing higher success rates for students, but the arguement for some is that students learn better in more pleasant surroundings. Even so, allocating all of the money to these schools and leaving out other public schools in the Los Angeles area does still indeed make this a Pareto Efficient outcome. The question that determines Pareto efficieny is, is it possible to make someone better off without making anyone else worse off? If the answer is no, the system is efficient. If one group received all of the production of an economy, while a second person received absolutely nothing, most people would agree that this is not fair, but is it Pareto efficient? Well, is it possible to make the second group better off without making the first person worse off? No. The first group will suffer, even if only a little bit, from loss of the extra goods because the state only has a limited amount of resources. It may be true that the loss to the first group is smaller than the gain to the second group, but the fact remains that, to make the second group better off, you must do it at the expense of the first group.

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