IDEAS home Printed from https://ideas.repec.org/a/bla/coecpo/v18y2000i2p238-247.html
   My bibliography  Save this article

Economies of scale in public education: an econometric analysis

Author

Listed:
  • K. Chakraborty
  • B. Biswas
  • WC. Lewis

Abstract

This article investigates the sources of scale economies in the production of public education. The relationship between the average cost of producing educational output and school characteristics including school and district size is estimated using a neoclassical cost function. The empirical analysis used panel data from Utah school districts and estimates the function using the covariance and error component models after making necessary corrections for heteroskedasticity and autocorrelation. The uncorrected fixed effects model generates a significant negative coefficient on district size in both the cost and expenditure functions; the coefficient on number of students has the hypothesized sign but is not significant in either equation. After making various corrections for autocorrelation and heteroskedasticity, the coefficients have the correct signs and are significant in all equations. Thus, it is concluded that scale economies arise from both sources but that the evidence is stronger for district size.

Suggested Citation

  • K. Chakraborty & B. Biswas & WC. Lewis, 2000. "Economies of scale in public education: an econometric analysis," Contemporary Economic Policy, Western Economic Association International, vol. 18(2), pages 238-247, April.
    • Handle: RePEc:bla:coecpo:v:18:y:2000:i:2:p:238-247
    DOI: 10.1111/j.1465-7287.2000.tb00021.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1465-7287.2000.tb00021.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1465-7287.2000.tb00021.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Downes, Thomas A. & Pogue, Thomas F., 1994. "Adjusting School Aid Formulas for the Higher Cost of Educating Disadvantaged Students," National Tax Journal, National Tax Association;National Tax Journal, vol. 47(1), pages 89-110, March.
    2. Gertler, Paul J & Waldman, Donald M, 1992. "Quality-Adjusted Cost Functions and Policy Evaluation in the Nursing Home Industry," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1232-1256, December.
    3. Downes, Thomas A. & Pogue, Thomas F., 1994. "Adjusting School Aid Formulas for the Higher Cost of Educating Disadvantaged Students," National Tax Journal, National Tax Association, vol. 47(1), pages 89-110, March.
    4. Jay G. Chambers, 1978. "Educational Cost Differentials and the Allocation of State Aid for Elementary/Secondary Education," Journal of Human Resources, University of Wisconsin Press, vol. 13(4), pages 459-481.
    5. Ratcliffe, Kerri & Riddle, Bruce & Yinger, John, 1990. "The fiscal condition of school districts in Nebraska: Is small beautiful?," Economics of Education Review, Elsevier, vol. 9(1), pages 81-99, March.
    6. Richard J. Butler & David H. Monk, 1985. "The Cost of Public Schooling in New York State: The Role of Scale and Efficiency in 1978-79," Journal of Human Resources, University of Wisconsin Press, vol. 20(3), pages 361-382.
    7. Elchanan Cohn, 1968. "Economies of Scale in Iowa High School Operations," Journal of Human Resources, University of Wisconsin Press, vol. 3(4), pages 422-434.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Colegrave, Andrew D. & Giles, Margaret J., 2008. "School cost functions: A meta-regression analysis," Economics of Education Review, Elsevier, vol. 27(6), pages 688-696, December.
    2. Brunner, Eric J. & Squires, Tim, 2013. "The bargaining power of teachers’ unions and the allocation of school resources," Journal of Urban Economics, Elsevier, vol. 76(C), pages 15-27.
    3. Xi Zhang & Scott Rozelle, 2022. "Education Universalization, Rural School Participation, and Population Density," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 30(4), pages 4-30, July.
    4. Driscoll, Donna & Halcoussis, Dennis & Svorny, Shirley, 2003. "School district size and student performance," Economics of Education Review, Elsevier, vol. 22(2), pages 193-201, April.
    5. Tao, Hung-Lin & Yuan, Ming-Ching, 2005. "Optimal scale of a public elementary school with commuting costs--a case study of Taipei county," Economics of Education Review, Elsevier, vol. 24(4), pages 407-416, August.
    6. Lu, Ming & Zhang, Xi, 2019. "Towards an intelligent country: China’s higher education expansion and rural children’s senior high school participation," Economic Systems, Elsevier, vol. 43(2), pages 1-1.
    7. Haelermans, Carla & Ruggiero, John, 2013. "Estimating technical and allocative efficiency in the public sector: A nonparametric analysis of Dutch schools," European Journal of Operational Research, Elsevier, vol. 227(1), pages 174-181.
    8. Haelermans, Carla & De Witte, Kristof, 2012. "The role of innovations in secondary school performance – Evidence from a conditional efficiency model," European Journal of Operational Research, Elsevier, vol. 223(2), pages 541-549.
    9. Heinesen, Eskil, 2005. "School district size and student educational attainment: evidence from Denmark," Economics of Education Review, Elsevier, vol. 24(6), pages 677-689, December.
    10. Gonzalo Sanz-Magallon-Rezusta & Manuel M. Molina-Lopez & Pilar Melendo-Matias, 2017. "Economies of Scale in Private and Charter Spanish Schools Under an Ownership and Management Perspective," ACTA VSFS, University of Finance and Administration, vol. 11(1), pages 7-27.
    11. Leung, Ambrose & Ferris, J. Stephen, 2008. "School size and youth violence," Journal of Economic Behavior & Organization, Elsevier, vol. 65(2), pages 318-333, February.
    12. Brennan, Shae & Haelermans, Carla & Ruggiero, John, 2014. "Nonparametric estimation of education productivity incorporating nondiscretionary inputs with an application to Dutch schools," European Journal of Operational Research, Elsevier, vol. 234(3), pages 809-818.
    13. Rhys Andrews, 2013. "Local government size and efficiency in labor-intensive public services: evidence from local educational authorities in England," Chapters, in: Santiago Lago-Peñas & Jorge Martinez-Vazquez (ed.), The Challenge of Local Government Size, chapter 7, pages 171-188, Edward Elgar Publishing.
    14. Jos L. T. Blank & Thomas K. Niaounakis, 2019. "Managing Size of Public Schools and School Boards: A Multi-Level Cost Approach Applied to Dutch Primary Education," Sustainability, MDPI, vol. 11(23), pages 1-11, November.
    15. Mehari Mekonnen Akalu, 2002. "Measuring and Ranking Value Drivers," Tinbergen Institute Discussion Papers 02-043/2, Tinbergen Institute.
    16. Rhys Andrews, 2012. "Local Government Size and Efficiency in Labour Intensive Public Services: Evidence from Local Educational Authorities in England," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1214, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Duncombe, William & Yinger, John, 2000. "Financing higher student performance standards: the case of New York State," Economics of Education Review, Elsevier, vol. 19(4), pages 363-386, October.
    2. Juan Luis Gómez‐Reino & Santiago Lago‐Peñas & Jorge Martinez‐Vazquez, 2023. "Evidence on economies of scale in local public service provision: A meta‐analysis," Journal of Regional Science, Wiley Blackwell, vol. 63(4), pages 793-819, September.
    3. Andrews, Matthew & Duncombe, William & Yinger, John, 2002. "Revisiting economies of size in American education: are we any closer to a consensus?," Economics of Education Review, Elsevier, vol. 21(3), pages 245-262, June.
    4. Duncombe, William & Yinger, John, 2005. "How much more does a disadvantaged student cost?," Economics of Education Review, Elsevier, vol. 24(5), pages 513-532, October.
    5. William Duncombe & John Yinger, 2001. "Does School Consolidation Cut Costs?," Center for Policy Research Working Papers 33, Center for Policy Research, Maxwell School, Syracuse University.
    6. Yuwei Zhang & Jun Li & Dongmei Zuo & Colleen Heflin, 2024. "Adopting the Standard Medical Deduction Increased State SNAP Enrollment and Benefits," Center for Policy Research Policy Briefs 10, Center for Policy Research, Maxwell School, Syracuse University.
    7. Rhys Andrews, 2013. "Local government size and efficiency in labor-intensive public services: evidence from local educational authorities in England," Chapters, in: Santiago Lago-Peñas & Jorge Martinez-Vazquez (ed.), The Challenge of Local Government Size, chapter 7, pages 171-188, Edward Elgar Publishing.
    8. Yilin Hou & Yusun Kim & John Yinger, 2019. "Does Coordination Among Assessing Units Generate Returns to Scale? Evidence from New York State," CESifo Working Paper Series 7931, CESifo.
    9. Fox, William F. & Gurley, Tami, 2006. "Will consolidation improve sub-national governments ?," Policy Research Working Paper Series 3913, The World Bank.
    10. Rhys Andrews, 2012. "Local Government Size and Efficiency in Labour Intensive Public Services: Evidence from Local Educational Authorities in England," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1214, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    11. William Duncombe & John Yinger, 1997. "Why is it so hard to help central city schools?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 16(1), pages 85-113.
    12. Albert Solé-Ollé & Núria Bosch, 2005. "On the Relationship between Authority Size and the Costs of Providing Local Services: Lessons for the Design of Intergovernmental Transfers in Spain," Public Finance Review, , vol. 33(3), pages 343-384, May.
    13. Tae Ho Eom & William Duncombe & Phuong Nguyen-Hoang & John Yinger, 2014. "The Unintended Consequences of Property Tax Relief: New York’s STAR Program," Education Finance and Policy, MIT Press, vol. 9(4), pages 446-480, October.
    14. Kalyan Chakraborty & John Poggio, 2008. "Efficiency and Equity in School Funding: A Case Study for Kansas," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 14(2), pages 228-241, May.
    15. Marvin E. Dodson & Thomas A. Garrett, 2004. "Inefficient Education Spending in Public School Districts: A Case for Consolidation?," Contemporary Economic Policy, Western Economic Association International, vol. 22(2), pages 270-280, April.
    16. Nguyen-Hoang, Phuong, 2013. "Tax Limit Repeal and School Spending," National Tax Journal, National Tax Association;National Tax Journal, vol. 66(1), pages 117-148, March.
    17. Bo Zhao, 2023. "Estimating the cost function of connecticut public K–12 education: implications for inequity and inadequacy in school spending," Education Economics, Taylor & Francis Journals, vol. 31(4), pages 439-470, July.
    18. Michah W. Rothbart, 2020. "Does School Finance Reform Reduce the Race Gap in School Funding?," Education Finance and Policy, MIT Press, vol. 15(4), pages 675-707, Fall.
    19. 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, Cambridge University Press, vol. 32(3), pages 573-583, December.
    20. Stan Chervin & Kelly Edmiston & Matthew N. Murray, 2000. "Urban Malls, Tax Base Migration, and State Intergovernmental Aid," Public Finance Review, , vol. 28(4), pages 309-334, July.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:coecpo:v:18:y:2000:i:2:p:238-247. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/weaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.