POTENTIAL COST SAVINGS FROM SCHOOL-DISTRICT CONSOLIDATION - A CASE-STUDY OF NEW-YORK

This article presents the results of a detailed study of potential cos t savings from consolidation of New York school districts. It extends past research on consolidation by developing a theoretical framework w hich distinguishes several dimensions of economies of scale and define s an empirical cost function for schooling. The results indicate poten tially sizeable costs savings from consolidation of districts with few er than 500 pupils. Using such districts as candidates for consolidati on, the study examines in detail the implications of merging these dis tricts with one of their neighbors and finds relatively few districts strong candidates for full consolidation in New York, although some ma y benefit from sharing of administrative and support functions. The es timated cost model also sheds light on potential diseconomies associat ed with large city school districts. While findings apply directly to New York, the method developed here has general relevance to state edu cation policy by helping to target candidate school districts for cons olidation, and, where consolidation is not feasible, adjusting state a id formulae to reflect more accurately the cost impacts of scale.