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Inefficient education spending in public school districts: a case for consolidation

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  • Thomas A. Garrett
  • Marvin E. Dodson

Abstract

This paper estimates scale economies for Arkansas school districts. Large economies of scale exist in teacher salary and supply costs, as well as total costs. Our results suggest that districts, especially rural districts, would experience measurable cost-savings from consolidation. We simulate a hypothetical rural school district consolidation to obtain cost-saving estimates from consolidation. Simulations indicate that districts could save an average of 34 percent in average variable costs. At the state level, consolidation of rural districts in Arkansas could annually save million. However, consolidation of school districts may increase various implicit costs to students and local communities.

Suggested Citation

  • Thomas A. Garrett & Marvin E. Dodson, 2003. "Inefficient education spending in public school districts: a case for consolidation," Working Papers 2002-010, Federal Reserve Bank of St. Louis.
  • Handle: RePEc:fip:fedlwp:2002-010
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    References listed on IDEAS

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    1. Hanushek, Eric A., 2006. "School Resources," Handbook of the Economics of Education, Elsevier.
    2. Jacques, Charles & Brorsen, B. Wade & Richter, Francisca G.-C., 2000. "Consolidating Rural School Districts: Potential Savings And Effects On Student Achievement," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 32(03), December.
    3. Hanushek, Eric A, 1986. "The Economics of Schooling: Production and Efficiency in Public Schools," Journal of Economic Literature, American Economic Association, vol. 24(3), pages 1141-1177, September.
    4. Thomas A. Garrett, 2001. "Economies of Scale and Inefficiency in County Extension Councils: A Case for Consolidation?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(4), pages 811-825.
    5. Gyimah-Brempong, Kwabena, 1987. "Economies of Scale in Municipal Police Departments: The Case of Florida," The Review of Economics and Statistics, MIT Press, vol. 69(2), pages 352-356, May.
    6. DeBoer, Larry, 1992. "Economies of scale and input substitution in public libraries," Journal of Urban Economics, Elsevier, vol. 32(2), pages 257-268, September.
    7. Brewer, Dominic J., 1996. "Does more school district administration lower educational productivity? Some evidence on the "Administrative Blob" in New York public schools," Economics of Education Review, Elsevier, vol. 15(2), pages 111-124, April.
    8. William Sander, 1997. "Catholic High Schools and Rural Academic Achievement," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(1), pages 1-12.
    9. Jimenez, Emmanuel, 1986. "The structure of educational costs: Multiproduct cost functions for primary and secondary schools in latin America," Economics of Education Review, Elsevier, vol. 5(1), pages 25-39, February.
    10. Christensen, Laurits R & Greene, William H, 1976. "Economies of Scale in U.S. Electric Power Generation," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 655-676, August.
    11. Hanushek, E.A.omson, W., 1996. "Assessing the Effects of School Resources on Student Performance : An Update," RCER Working Papers 424, University of Rochester - Center for Economic Research (RCER).
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    Cited by:

    1. Scorsone, Eric, 2007. "School District and Municipal Reorganization: Research Findings & Policy Proposals," Staff Papers 6543, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    2. Christopher C. Klein, 2007. "Efficiency versus Effectiveness: Interpreting Education Production Studies," Working Papers 200703, Middle Tennessee State University, Department of Economics and Finance.
    3. Leach, John & Payne, A. Abigail & Chan, Steve, 2010. "The effects of school board consolidation and financing on student performance," Economics of Education Review, Elsevier, vol. 29(6), pages 1034-1046, December.
    4. Tiller, Kelly & Jakus, Paul M., 2005. "Applying the Miceli Model to Explain Cooperation in Municipal Solid Waste Management," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 34(2), October.

    More about this item

    Keywords

    Education;

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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