The Cost of Public Schooling in New York State: The Role of Scale and Efficiency in 1978-79

Cost differentials between large and small school districts are decomposed into scale and efficiency effects. The analysis shows that scale economies enjoyed by large districts can come at the expense of the efficient production of educational outcomes. Attention is focused on the possible loss of efficiency associated with efforts to increase size by closing schools and consolidating school districts. Empirical evidence from New York State is presented which shows that lower levels of efficiency exist in large compared to small school districts. Implications for policy are explored.