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 and allow school districts to focus on their core missions. Previous studies that analyzed a single school-year of data have found conflicting and inconclusive evidence regarding the impact of privatization on transportation costs. This paper seeks to improve on previous studies by estimating a cost equation using data spanning six school-years. The primary result is that privatization actually acts to increase transportation costs by a substantial amount. Estimates using the data in a pooled cross section form predicted that going from fully outsourced to fully in house reduced costs by approximately 15.8 percent, while the analogous estimate using a first differenced equation was a savings of 20.7 percent.
Thompson-Ferguson, Owen. The Estimated Impact of Privatizing Student Transportation On Costs for Minnesota School Districts. April 29 2009. May 8 2009. Hubert H Humphrey Institute of Public Affairs.
professional paper in fulfillment of the Masters of Public Policy degree
The Estimated Impact of Privatizing Student Transportation On Costs of Minnesota School Districts.
Hubert H. Humphrey Institute of Public Affairs.
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