In this paper, we provide evidence as to the cost efficiency of charter schools relative to traditional public schools, and explore the extent to which those differences are attributable to differences in hiring and compensation practices, or to differences in the length of time a campus has been operating. We generate estimates of efficiency using a stochastic cost frontier approach. We estimate a translog stochastic cost frontier model using panel data for charter campuses and traditional public campuses in Texas over the five-year period 2005-2009.
Our main findings suggest that charter schools are able to produce educational outcomes at lower cost than traditional public schools鈥攑robably because they face fewer regulations鈥攂ut are not systematically more efficient relative to their frontier than are traditional public schools.