The Human Capital Approach to Education

Educational outcome evaluated as children's human capital, and generally equated to their future income. This is the approach mainly adopted in this book and by most economic growth models.
On page 3 a list of common interpretations of education is provided. Other than the human capital aspect, it is also suggested that education is perceived also as a screening mechanism which calls more for private financing, and as contributing to social coherence which favors public financing as well as provision. A fourth interpretation as 'consumption good that is valued for its own sake' was not elaborated much but should be referring to education as a tradition and generally accepted necessity.

Fitting Education into the Demand-Supply Framework

Chapter 4.
First treating education as a private good. Parents as consumers, forming utilities based on two commodities, children's human capital as one, and other consumptions as the other. Production of this human capital is simplified as linear on investment by parents, so that price doesn't matter and supply is fixed by demand (schooling outcomes perfectly determined by parents). Then the only problem in this economy is for the parents to decide how much portion of their income to spend on education, so that their utility is maximized. In such a setting there is no link in between economic agents, as even prices are normalized and fixed.
As a next step, interactions between parents are introduced with a majority voting scheme, and equilibrium is achieved when a majority of the parents share in common a preferred tax ratio of their income, which tax will be distributed equally among all children's education, corresponding to the parents' maximum utility. In this setting, voted tax serves as a counterpart of competitive pricing in a market mechanism, and behavioral agents are linked together through group decision rather than exchange.