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And Others TITLE Cost Analysis for Educational Planning and Evaluation: Methodology and Application to Instructional Technology

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And Others TITLE Cost Analysis for Educational Planning and Evaluation: Methodology and Application to Instructional Technology DOCUMENT RESUME ED 127 918 IR 003 880 AUTHOR Jamison, Dean T.; And Others TITLE Cost Analysis for Educational Planning and Evaluation: Methodology and Application to Instructional Technology. INSTITUTION Educational Testing Service, Princeton, N.J. SPONS AGENCY Agency for International Development (Dept. of State), Washington, D.C. Bureau for Technical Assistance.; National Science Foundation, Washington, D.C. REPORT NO ARC-371.33-J-328; DN-AAA-092; EHR-19 PUB DATE 76 CONTRACT AID-931-11-999-987-73 GRANT NSF-EPP-74-23504 NOTE 305p.; A.I.D. Studies in Educational Technology EDRS PRICE MF-$0.83 HC-$16.73 Plus Postage. DESCRIPTORS Capital Outlay (for Fixed Assets) ;*Case Studies; *Costs; Developing Nations; Educational Planning; Educational Radio; Educational Research; *Educational Technology; Educational Television; Evaluation Methods; Expenditure Per Student; Experimental Programs; *Instructional Media; Mass Media; *Media Research; National Programs; Operating Expenses; Program Costs; Tables (Data); Television Research IDENTIFIERS *Cost Analysis; El Salvador; Korea; Maryland (Hagerstown); Mexico; Nicaragua; Stanford University ABSTRACT A methodology is presented which assists government decision makers in making cost analyses of ongoing and future educational projects. Part one develops the methodology in general terms, and part two illustrates its application by examining the cost vtructure of instructional radio and television projects in developing countries. Part three contains nine case studies in educational radio and television cost analysis: the Nicaraguan Radio Mathematics Project, the Mexican Radioprimaria; the El Salvador Instructional Television System, the Stanford Instructional Television System, the Hagerstown Instructional Television System, the Korean Elementary/Middle School Project, and the Mexican Telesecundaria. (CH) *********************************************************************** Documents acquired by ERIC include many informal unpublished * materials not available from other sources. ERIC makes every effort * * to obtain the best copy available. Nevertheless, items of marginal * * reproducibility are often encountered and this affects the quality * * of the microfiche and hardcopy reproductions ERIC makes available * * via the ERIC Document Reproduction Service (EDRS). EDRS is not * responsible for the quality of the original document. Reproductions * * supplied by EDRS are the best that can be made from the original. * *********************************************************************** COST ANALYSIS FOR EDUCATIONAL PLANNING AND EVALUATION: METHODOLOGY AND APPLICATION TO INSTRUCTIONAL TECHNOLOGY by Dean T. Jamison Steven J. Klees Stuart J. Wells U.S. OEPARTMENT OF HEALTH. EOUCATION IL WELFARE NATIONAL INSTITUTE OF EDUCATION THIS DOCUMENT HAS BEEN REPRO- DUCED EXACTLY AS RECEIVED FROM THE PE RSCIN OR ORGANIZATION ORIGIN- ATING IT PDINTS DF VIEW OR OPINIDNS STATED 00 NOT NECESSARILY REPRE- SENT DFFICIAL NATIDNAL INSTITUTE DF' EDUCATIDN POSITIDN OR PDLICY Economics and Educational Planning Group Educational Testing Service Princeton, New Jersey 08540 1976 2 ACKNOWLEDGEMENTS The U.S. Agency for International Development (through Contract 931-11-999-987-73) and the U.S. National ScienceFoundation (through Grant EPP74-23504) provided financialsupport to the Educational Testing Service (ETS), Princeton, New Jersey,to conduct the research reported here. Dean T. Jamison, while on the staff of En,was Principal Investigator on theGe efforts;Steven J. Klees and Stuart J. Wells served as consulta-Lts to ETS. Jamison is now with the Development Economics Department of rt;,e World Bank; Kleesis with the School of Education, Stanford University; and Wellsis with the School of Business, San Jose State University. UNESCO's International Institute for EducationalPlanning made their facilities avaii,able to the authorsduring the writing of the manuscript, and the authors benefited fromrelated ongoing studies of UNESCO's Division of EducationalMaterials, Methods, and Techniques. The conclusions and opinions expressedherein do not necessarily reflect the official views of any of thesources of support. The authors have received valuable comments froma number of individuals on outlines and an earlier draft ofthis manuscript and wish to acknowledge the follwoing with thanks:Eduardo Arena (Presidencia of Mexico), John E. Austin (Farvard University),Clifford Block (U.S. Agency for Internatic,nal Development), WilliamCharleson (U.S. Agency for International Development), RussellDavis (Harvard University), Douglas E. Hall (New Educational ReformAssociates, Concord, N. H.), Wallace H. Hannum (Florida State University),Robert Hornik (Stanford University), Marshall V. Jamison, YoonTai Kim (Korean Educational Developmsnt Institute), Yeap Lay Leng (Institute ofEducation, Singapore), John Mayo (Stanford University), FrancoisOrivel (University of Dijon), Barbara Searle (Stanford University), DavidSprague (U.S. Agency for Intqrnational Development), Claude Tibi (InternationalInstitute for Educational Planning), and Kan-Hua Young (EducationalTesting Service). The authors especially wish to thank Stella M.Evans of Trenton State College for her excellent assistance in all phases of the preparation of this manuscript; her effort andexpertise improved this work considerably and is greatly appreciated. 3 CONTENTS Page Acknowledgements COntents ii List oi Tables iv List of Figures vii Preface viii PART ONE: COST ANALYSIS FOR EDUCATIONAL PLANNING AND EVALUATION Chapter I. Cost Analysis: Methodology 2 1. Collection and organization of cost data 4 2. Cost functions and their properties 6 3. Treatment of Lime: Annualization of capital costs . 13 4. Treatment of time: Student utilization over time. 20 5. Cost tradeoffs 26 6. Summary 28 Chapter II. Cost Analysis: Special Problems 32 1. Treatment of shadow prices 32 2. Cost analysis for the project planner versus the project manager 38 3. Errors in cost estimation 41 4. Problems of finance 49 5. Summary 54 PART TWO: COST ANALYSIS OF INSTRUCTIONAL TECHNOLOGY PROJECTS Chapter I,I. Cost Experience With Instructional Radioand Television Systems 62 1. Instructional radio projects 66 2. Instructional television projects 77 4 ii CONTENTS (Continued) Page 3. Summary 88 Chapter IV. Cost Functions For Instructional Radio and Television . 94 1. Determinants of total costs 94 2. Component costs 101 3. Cost function examples 126 PART THREE: CASE STUDIES Radio Chapter V. The Nicaraguan Radio Mathematics Project 137 Chapter VI. The Mexican Radioprimaria 154 Television Chapter VII. The El Salvador Instructional Television System . 166 Chapter VIII. The Stanford Instructional Television System 187 Chapter IK. The Hagerstown Instructional Television System . 216 Chapter X. The Korean Elementary/Middle School Project 233 Chapter XI. The Mexican Telesecundaria. 257 Appendix: Exchange Rates and GNP Deflators 286 Referenc,es 287 5 iii LIST OF TABLES Table Page Total, Average, and Marginal Cost Example 9 1.2 Values of the.Annualization Factor 17 1.3 The Extent of Cost Underestimation dueto not Utilizing the Appropriate Interest Rate ir$ Analyzing Ongoing Instructional Technology Projects 19 1.4 Example Cost and Student Usage 24 1.5 Example Values of ACii 25 1.6 Increase in Student o Teacher Ratio Required to Finance Technology 29 11.1 Calculated Grant Component of Aid Hard Currency Loans 52 111.1 Cuc.t Summary of Four Instructional Radio Projects 89 111.2 Cost Summary of Five Instructional Television Projects 90 IV.1 Determining Variables of the Total Cost Function 96 1V.2 Program Production Costs 105 IV.3 AM/FM Radios: Price, Quality, and Battery Life 116 IV.4 Alternative Power Sources 121 1V.5 Annual Power Source Costs and Utilization Rate..... 123 IV.6 Cost of Book Production in Taipei, Republic of China 125 IV.7 Example Values of Cost Components 127 V.1 Start Up Costs (through February 1975) 139 V.2 Project Administration Costs 141 V.3 Research Costs 142 V.4 Costs of Preparing 150 Radio Lessons 144 V.5 Reception Site Costs (pet 150 Lessons) 147 iv LIST OF TABLES (Continued) Table Page V.6 Average Costs 152 VI.1 Codta of Radioprimaria 159 VI.2 Annual Cost per Student Comparison: Radioprimaria Versus Traditional Instruction 164 VII.1 Cost of Instructional Television in El Salvador for Third Cycle Schools 169 VII.2 Costs of Prograr. Production 174 VII.3 Average Total Costs from Year i to Year j for Third Cycle Schools 180 VII.4 Average Government Costs from Year i to Year j for Third Cycle Schools 181 VIII.1 Utilization of the Stanford ITV System 193 VIII.2 Costs of the Stanford ITV System 197 VIII.3 Company Reception Costs 200 VIII.4 Total Cost Function, Stanford ITV System 1974 203 VIII.5 Average Costs per Student from Year i to Year j 208 VIII.6 Average Costs per Student from Year i to Year j 210 VIII.7 Average Costs per Student from Year i to Year j 211 VIII.8 Average Costs per Student from Year i tc Year j 212 IX.1 Costs and Utilization for the Hagerstown ITV System 219 IX.2 Total Cost Function Hagerstown ITV Project 1972 225 IX.3 Average Costs per Student from Year i to Year j . 228 IX.4 Average Costs per Student Hourfrom Year i to Year j 230 X.1 System Development and Start Up Costs 236 7 LIST OF TABLES (Continued) Table Page X.2 Capital Costs of Studio Facilities 238 X.3 Recurrent Costs of Program Production 240 X.4 Total Production Costs per Program 241 X.5 Capital Costs of Transmission System 243 X.6 Recurrent Costs of Transmission System 246 X.7 Total Annual Costs per Channel per Year 247 X.8 Reception
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