Academic journal article American Economist

A Case Study of the Supply and Demand for Morning Kindergarten

Academic journal article American Economist

A Case Study of the Supply and Demand for Morning Kindergarten

Article excerpt

I. Background

I became interested in this topic when I prepared to register my older son for kindergarten in the public school. Currently, in Haverford Township, Pennsylvania, kindergarten is half day, with a morning and an afternoon session, Kindergarten registration is a telephone system's nightmare. On the appointed day, the school's phones open at 8:30 am, and the school assigns children to the morning or afternoon time slot according to the order in which it receives calls. Parents whose calls are answered first are the most likely to be assigned their preferred time slot, instead of those with the strongest preferences. Typically, more parents wish to enroll their children in morning kindergarten than there are available slots; therefore, many parents who prefer morning kindergarten lose out. Is there a more efficient way to allocate the scarce supply of morning slots?

II. Public Provision of a Private Good

Much of the allocation problem arises because education can be considered a private good that is publicly provided.(1) Each parent would be more likely to receive the type of education he truly demanded for his children if he purchased it in a private market. Although there are countless private schools in this country, the majority of children are educated in the public schools, which are funded by the taxpayers. The amount of taxes each family pays is not related to the number of children that family has enrolled in the public school system.

In this system, although the marginal cost of providing an education to a child is positive, there is no relation between that marginal cost and the price to the parent of sending a child to school. Essentially, the price paid by a family of sending an additional child to a public school is zero.

Given the nature of the public school system, each child is entitled to attend the public school. All children of kindergarten age will be placed in a class. In this sense, it is impossible to have a scarcity of slots. In the minds of the parents, however, the morning and afternoon classes are not interchangeable; more parents prefer the morning slot. Within the constraints of the public provision of education, is there a way to implement a price system to allocate the morning and afternoon time slots in a way that is superior to the current system?

III. Conventional Price System

Assume that there are 100 kindergarten children in a cohort group. There are 100 kindergarten slots, 50 in the morning, and 50 in the afternoon. Thus, supply of morning kindergarten is fixed at Q = 50. More than 50 parents want their children in the morning session, where "want" is defined to mean willing to pay some positive price. Throughout this analysis, "price" refers to the "surcharge" imposed for morning as opposed to afternoon kindergarten; it is not the price of a kindergarten education. The result is an excess demand for morning kindergarten.

The strength of parental preference is measured by their willingness to pay; those for whom the morning session is more important are willing to pay a higher price than others to obtain it. Figure 1 shows a hypothetical demand for and supply of morning kindergarten. The numbers along the quantity axis should be interpreted for the demand curve in the following manner: Q = 1 means the parent with the strongest preference for morning kindergarten, Q = 2 is the parent with the second strongest preference, etc. The slots themselves are interchangeable; the parents do not care whether they get the first or fiftieth morning slot. Q = 1-25 means the parents with the 25 strongest preferences; Q = 26-50 means the parents with the twenty-sixth through fiftieth strongest preferences, etc. The demand curve indicates that 75 parents demand morning kindergarten; i.e., 75 parents are willing to pay P[is greater than]0. Supply is fixed at Q = 50. There is excess of 25 at the current price of P = 0. …

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