The Estimated Cost Impact of Privatizing Student Transportation in Minnesota School Districts

21 Pages Posted: 19 Jan 2012

See all articles by Owen Thompson

Owen Thompson

Williams College - Department of Economics

Date Written: January 22, 2010

Abstract

Student transportation makes up a substantial portion of a typical school district’s operating budget, and sub-contracting bus service to private firms has been advanced by some as a way to reduce transportation costs. Previous studies have found conflicting evidence regarding the cost impact of privatization. This paper seeks to improve on previous studies by estimating cost equations using data that spans six school-years. The primary result is that privatization acts to substantially increase transportation costs. Estimates using a pooled cross section predicted that going from fully outsourced to fully in house reduced costs by approximately 15.8%,

Suggested Citation

Thompson, Owen, The Estimated Cost Impact of Privatizing Student Transportation in Minnesota School Districts (January 22, 2010). Public Choice, Vol. 146, No. 3-4, pp. 319-339, 2011. Available at SSRN: https://ssrn.com/abstract=1987725

Owen Thompson (Contact Author)

Williams College - Department of Economics ( email )

Fernald House
Williamstown, MA 01267
United States

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