Resource productivity and returns to scale in school-based mouthrinsing programs

The viability of community dental programs is influenced by various factors, including costs and effectiveness. Costs, in turn, are influenced by the prices and productivity of resources, and variations in these will influence not only comparisons among programs providing a homogeneous service but also any conclusions that can be drawn about cost-effectiveness. This paper eliminates wage effects and examines resource productivity and returns to scale in relationship to the size of a group of school-based mouthrinsing programs. The research questions were to determine: 1) whether the programs exhibit increasing, decreasing, or constant returns to scale, and 2) the productivity of labor and capital. Data from 14 programs in the US were pooled for 2 yr to yield 28 observations. The production relationship between output (numbers of participants) and inputs (labor and capital) was specified in a Cobb-Douglas model. Findings were that 1) the programs exhibited decreasing returns to scale (P less than 0.01); and 2) the average and marginal productivities of labor and capital declined (P less than 0.001). The implications of these findings are that, with equal wages and homogeneous labor, the average cost of mouthrinsing per participant would have increased as a function of the size of these programs. To the extent that the economics of community dental programs are influenced not only by the costs and productivity of the resources they use but also by their size, there may be some value in research on the economics of optimum program size and the role of management in program organization.