Scale Economies, Capacity Utilization, and School Costs: A Comparative Analysis of Secondary and Elementary Schools.

studies of scale economies in public schools typically use the school district, rather than the individual school, as the unit of observation because various pertinent school data are more readily available for the district. In the few cases where analyses have appropriately dealt with individual schools, the focus of attention has been at the secondary level.1 Most of the published cost analyses, moreover, relate to the sixties and the early seventies during which time schools were operating generally, at full capacity. Thus, they understandably exhibit little concern over cost implications of school under-utilization. Enrollment decline with its impact on school costs is currently a subject that commands intense interest. The present study, using a school level data base recently developed by the Montgomery County (Maryland) Public Schools, analyzes school costs under conditions of declining enrollment. Specifically, it examines separating the effects of changing school size and of capacity under-utilization on school operating costs for secondary schools and separately for elementary schools.