School District Consolidation, Size and Spending: An Evaluation

This study empirically tests the notion that consolidating smaller public school districts will save taxpayers money. Multiple regression analyses are employed to analyze the relationship between district size and per-pupil expenditures in the state of Michigan, focusing on the five most recent school years for which data are available.

Based on the model developed for this paper, the most cost-effective size for school districts in Michigan is roughly 2,900 students. Both smaller and larger districts are likely to spend more per pupil, other things being equal. In light of this finding, it is correct to surmise that some Michigan public school districts are probably too small, and others too large, to operate with optimal cost efficiency.