The Class Size Trade-Off

Founder of Harlem Success Academy Charter Schools, Eva Moskowitz, thinks like an economist and discusses the trade-offs involved in determining class size in her Washington Post opinion piece titled The cost of small class size. Here is her conclusion:

Overspending on class-size reduction is particularly unconscionable in tough fiscal times. We need to invest in ways that will help teachers be more effective, such as professional development, technology, school leadership and abundant curricular materials. Spending in these areas, already too low, should not be cut further in blind adherence to the cult of small class size.

While I don't agree with every point that she makes in the article, I am encouraged by her sound economic thinking. We need more administrators and policymakers to think like she does. There is not a one-size-fits-all strategy when it comes to education. For example, decreasing class size in a school with a high proportion of rookie teachers may have a greater impact on learning than decreasing class size in a school with mostly veterans.

In another scenario, if a school has a strong academic culture where behavior management is not a big issue, then increasing class size could make economic sense if it frees up funds for a new computer lab, teacher training, new curriculum, field trips, etc. Class size could also be varied within a particular school based on the course, the time of day, and the teacher's ability.

For more from Eva Moskowitz, she also spoke on NPR today about class size.

Dear Government....

Dear Government,

Please learn to live within your means.

For the truly math savvy politicians working for you, I will offer a most difficult inequality. If your politicians learn to follow this magical law of finance, then you can avoid defaulting on the $14 trillion of debt that you have racked up, and hopefully start to ween yourself off of those addicting lines of... credit. Government, I urge you to immediately start adhering to the following law of finance that has saved countless American citizens from financial ruin and pain: spending < revenue.

If you need help understanding this mathematical law, I am ready to offer my assistance for a small consulting fee. FYI, that would go under the spending category for you.

Spend wisely,
Z.O.

Free eBook Alert - The Simple Dollar Kindle Edition

If you have a Kindle, The Simple Dollar: How One Man Wiped Out His Debts and Achieved the Life of His Dreams by blogger Trent Hamm is free right now on Amazon.com. Here's the link. I haven't read the book yet, but Trent runs the Simple Dollar blog and writes insightful commentary on personal finance.

Addendum - no longer free as of 3/27/11

Barclays Bank Has a New Venture... Bicycles?

While in London last week, I came across a great new service sponsored by Barclays bank. The service is called Barclays Cycle Hire and opened in July 2010.

Docking station near Buckingham Palace

The premise of the service is the following: Instead driving your car, taking the underground, walking, or riding your own bike, you can rent a bike from a Barclay's docking station and turn it into a different Barclay's docking station near your workplace, gym, etc. To use the service, you have to pay a daily, weekly, or annual access fee plus a usage fee based on how long you rent the bike for on each trip. I have not run the numbers yet, but the apparent benefits are that one does not have to buy a bike, pay for maintenance and storage, or worry about your bike or parts of your bike being stolen. I rented a cycle while in London for a 30 minute trip and saved about a pound ($1.60) compared to what I would have payed using the underground and got to my destination just as fast.

One thing that I found very interesting was the pricing scheme. See below.

The pricing scheme is clearly encouraging short, quick trips, and heavily discouraging longer trips. They recognize this on the website as well.

"To hire for more than a couple of hours it might be cheaper for you to use a company that specialises in hiring for longer periods."

A ride less than 30 minutes has no additional cost other than the access fee that you pay upfront, whereas if you rent a bike for 3 to 6 hours you have to pay 35 pounds (roughly $60)! No quantity discounts here. For more info on the pricing scheme, click here.

By adding a financial penalty for longer rides, Barclay's is trying to manage the supply of cycles at docking stations so that the service does not lose the convenience factor. Imagine showing up expecting a bicycle and they have all been checked out, the nearest docking station is a 10 minutes walk away, but you need to be at work in 20 minutes. I assume Barclays is profit maximizing here and thinks that this pricing structure will help them the earn the highest return possible on their investment. In addition to potentially losing other customers, longer rides could mean there is a greater chance for the bike to be damaged or stolen by other citizens.

I think Barclay's is really onto something here. I am sure they will need to make adjustments to their model as they gain more experience in this business, but I think they will do very well in a city like London where transportation costs and living expenses are high, and the city is becoming more and more biker friendly. A company called B-Cycle appears to be offering a similar service in the US at a much smaller scale, although the pricing scheme seems to be somewhat different.

What do these pictures have in common?

They were all taken in Madrid, Spain. Several upcoming posts will be inspired by my recent trip to Europe.