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CALCULATING THE TRUE COST OF PRIVATE SCHOOL EDUCATION: BASED ON A SURVEY OF SOUTH AUSTRALIAN SCHOOL FEES
Author(s) -
Laws T.A.,
Fiedler Brenton
Publication year - 2002
Publication title -
australian journal of social issues
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.417
H-Index - 30
eISSN - 1839-4655
pISSN - 0157-6321
DOI - 10.1002/j.1839-4655.2002.tb01131.x
Subject(s) - order (exchange) , project commissioning , publishing , opportunity cost , economics , variety (cybernetics) , finance , business , actuarial science , demographic economics , political science , law , microeconomics , artificial intelligence , computer science
The cost of a child's education should not be a mystery to consumers, yet little has been published about the true costs, and it is no simple task for parents to calculate. This paper seeks to fill a gap in the research literature that exists in relation to informing parents and educationalists alike as to the true cost of private school education. The term cost is used in the economic sense as encompassing not only the price paid for the product (school fees) but also the opportunity cost to the family in terms of what they forego in order to finance private schooling. Identifying opportunity cost is a useful means of assessing the impact of factors, other than financial, that are influential in determining whether or not private education is purchased. From a survey of South Australian private schools, we have been able to provide a detailed account of the price variations between the fees charged, as well as identifying a variety of additional ancillary charges. Based on the survey figures, we have projected the amount of money that needs to be taken out of the family budget in order to pay for a child's private schooling. At the time the survey was conducted the cost of private school education across three strata, on average, ranged from $13,400 to $42,246. We calculated that incremental family pretax incomes of between $20,303 and $64,009 would be required to fund this education. The amounts represent an opportunity cost to a family whereby money could be put to alternative uses such as home renovation, an overseas holiday, or a buffer against unexpected life events. We conclude that the outlay is substantial for many families and that greater transparency of all costs is needed for families to make informed financial plans to accommodate the overall cost of education for their children.