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The IUP Journal of Industrial Economics:
Returns to Scale in the Private School Industry of Nagaland: A Production Function Approach
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In this article, the authors study the intricacies of the private schooling industry in Nagaland. The main objective of the study is to estimate the returns to education, by employing production function techniques. Kohima, the capital of Nagaland, is selected for the study, as most of the private schools have mushroomed in and around Kohima, in the recent years. Three types of production functionsCobb-Douglas, CES and Translogare estimated to ascertain the underlying production relation. It is concluded that the industry has a tendency to exhibit increasing returns to scale, and there exists a possibility for substituting capital for labor.

This article focusses on an analysis of the `enterprise of providing for schooling by the private sector' to those, who are ready to pay a much higher rate for services that otherwise (and conventionally), are imparted at a very cheap rate by the system of schools run by the government. It has been observed that there is an ever growing demand for private schooling in almost all states in India and the enterprise of private schooling has established itself so well, that it has now assumed the characteristics of a full-fledged industry in the tertiary sector.

The system of private enterprises imparting school education to students may well be called an `industry', though it is often startling, because conventionally, first, `industry' is often associated with `manufacturing', and secondly, providing for school education has been the activity of the state, mainly with the widely acclaimed objectives concerning welfare and promotion of human capital for fostering development. The impression created by the overtone of welfare and development that surrounds schooling, is often carried over to private schooling enterprise as well, though, evidently, the enterprise of providing private schooling is related to welfare and development no more than what any other enterprise turning out any other commodity or service is related to welfare and development.

 
 
 

Returns to Scale in the Private School Industry of Nagaland: A Production Function Approach, private schooling industry, production function techniques, private sector', full-fledged industry, tertiary sector, welfare and development.