Economies of Size in Public Schools: A Comparison of North Dakota and Indiana Data

Data from two states are used for an analysis of the extent to which savings can be achieved through school consolidation. The relationship between per pupil expenditures and enrollment is examined. It is shown that per pupil expenditures for instruction are linked to teachers salaries and pupil/teacher ratios via a simple mathematical relationship. Differences in per pupil expenditures for instruction among school districts for both North Dakota and Indiana are due primarily to variation in pupil/teacher ratios. Teachers’ salaries in both North Dakota and Indiana increase as enrollments increase. For expenditures other than instruction, very little evidence was found for potential savings due to increases in enrollment.