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.