Inefficient Education Spending in Public School Districts: A Case for Consolidation? |
| |
| Authors: | Marvin E DodsonIII Thomas A Garrett |
| |
| Institution: | Dodson:;Assistant Professor, Department of Economics, Finance, and Insurance and Risk Management, University of Central Arkansas, Conway, AR. Garrett:;Senior Economist, Federal Reserve Bank of St. Louis, 411 Locust Street, St. Louis, MO 63102. Phone 1-314-444-8601, Fax 1-314-444-8731, E-mail |
| |
| Abstract: | This article estimates scale economies for Arkansas school districts. Large economies of scale exist in teacher salary and supply costs, as well as total costs. The results suggest that districts, especially rural districts, would experience measurable cost savings from consolidation. The authors simulate a hypothetical rural school district consolidation to obtain cost-saving estimates from consolidation. Simulations indicate that districts could save an average of 34% in average variable costs. At the state level, consolidation of rural districts in Arkansas could annually save $40 million. However, consolidation of school districts may increase various implicit costs to students and local communities. (JEL I22 , I28 ) |
| |
| Keywords: | |
|
|
