This study weighs the validity of current arguments about the efficiency of public versus private schooling by critically examining the research that has compared the expenditures of public and private schools and by questioning common assumptions in the debate. Simple comparisons of per-pupil costs are found to be misleading as indicators of educational services because they do not include the publicly-mandated programs required of public schools, nor the donated resources by which private schools often supplement their services, nor the specialized instruciton and facilities often found in public schools. In addition, the author finds that those measures of relative effectiveness of education that generally favor private schools do not account adequately for the difficulties in accurately comparing student performance and in identifying the part of an outcome attributable to school resources. Assumptions found in most analyses of educational costs and productivity are then examined, including the views that the outputs and educational processes of public and private schools are identical and therefore comparable, and that the issues of efficiency and equity are independent. Concluding that current comparisons of public and private schools may not be valid, the paper suggests criteria for aid to private schools and topics for further research. (JW)