The Additional Cost of Operating Rural Schools: Evidence From Vermont

Abstract

State policymakers wrestle with long-standing questions and concerns about how to best provide additional fiscal support to rural school districts to ensure their students have access to adequate educational opportunities. In this study, we describe how one state developed empirically based estimates for the additional cost of operating rural schools, typified by small enrollment and location in sparsely populated areas. The study’s findings clarify that school size and location are relevant, but distinct, cost factors that should be accounted for state school finance policies. Additionally, the study provides a model for how other states might leverage administrative data and apply education cost modeling to estimate cost differences for rural schools that can be used to inform state school finance policy.

Influence of School Location on Cost Efficiency in Public Secondary Schools in Bomet County, Kenya

“…Schools in rural set up often miss on the cost saving opportunities. These results are similar to those of Kolbe, Baker, Atchison, Levin and Harris (2021) who noted that schools in rural areas often have higher operational costs associated with their geographical remoteness and sparsely populated schools which were then not able to benefit from economies of scale in their operations.…”

“…They are therefore most likely to save costs than rural areas." (Interviewee #4) These results are similar to those of Kolbe et al, (2021) who noted that schools in rural areas often have higher operational costs associated with their geographical remoteness and sparsely populated schools which were then not able to benefit from economies of scale in their operations. Angundaru, Lubogoyi and Bagire (2016) in a study in Uganda alluded that the urban based schools are able to charge high fees compared to their rural based counterparts and hence achieve higher sources of revenue.…”

Introduction to Special Topic: Rural Education Finance and Policy

“…Most of these districts are geographically isolated. Kolbe et al (2021) matches the finance data for Vermont from a 10-year period (FY 2009–2018) to other national data sets on characteristics of students, schools, and communities. Kolbe et al (2021) find that both economies of scale and population are real cost factors for rural districts.…”

“…Kolbe et al (2021) matches the finance data for Vermont from a 10-year period (FY 2009–2018) to other national data sets on characteristics of students, schools, and communities. Kolbe et al (2021) find that both economies of scale and population are real cost factors for rural districts. School size and population density appear to be independent factors influencing costs of education provision.…”

“…Kolbe et al (2021) provides a framework for estimating the cost differences for rural schools. At least 13 states provide some cost adjustment for rural districts in their state funding formula based on geographic location or population density.…”