Economies of Scale in Iowa High School Operations

Abstract

This study attempts to shed some light on the cost and output functions of the Iowa public school system (as of 1962-63). As a proxy for high school quality, incremental test scores on the Iowa Tests of Educational Development (ITED) are used. The estimated per pupil cost functions suggest the existence of significant economies of scale for the Iowa sample of 377 high school districts. When a parabolic cost function is utilized, an optimal high school size (in terms of the number of pupils in average daily attendance) can be estimated. Confidence limits for such an optimum are also calculated.