Skip to main content
SpringerLink
Log in

The estimated cost impact of privatizing student transportation in Minnesota school districts

  • Published:
Public Choice Aims and scope Submit manuscript

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%, while the analogous estimate using a first-differenced equation was a savings of 20.7%.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Alspaugh, J. W. (1996). The effects of geographic and management factors on the cost of pupil transportation. Journal of Education Finance, 22(3), 180–194.

    Google Scholar 

  • American School Bus Council (ASBC). Fact Sheet. As of 05/01/09 available at http://www.americanschoolbuscouncil.org/downloads/Fact%20Sheet_Safety.pdf.

  • Bails, D. (1979). Provision of transportation services. Public Choice, 34(1), 65–68.

    Article  Google Scholar 

  • Cassell, M. (2000). Taking them for a ride: an assessment of the privatization of school transportation in Ohio’s public school districts. Published by the Association of Federal, State, County and Municipal Employees.

  • Damask, J. A. (2000). Missing the bus. Paper presented at the meeting of the Association of Federal, State, County and Municipal Employees International Convention in Las Vegas, NV. June 24th–28th.

  • Domberger, S., & Jensen, P. (1997). Contracting out by the Public Sector: theory, evidence, prospects. Oxford Review of Economic Policy, 134(4), 67–78.

    Article  Google Scholar 

  • Harding, R. W. (1990). Contracting out the bussing of school children: an industrial organization approach. Unpublished doctoral dissertation. Los Angeles: University of California.

    Google Scholar 

  • Hilke, J. (1993). Cost savings from privatization: a compilation of findings. Reason Foundation How-to-Guide #6.

  • Hodge, G. A. (2000). Privatization: an international review of performance. Boulder: Westview Press.

    Google Scholar 

  • Hutchinson, E. B., & Pratt, L. J. (1999). The comparative cost of privatized public school transportation in Tennessee. Policy Studies Journal, 23(3), 446–458.

    Article  Google Scholar 

  • Hutchinson, E. B., & Pratt, L. J. (2007). Is contracting out government services the great panacea? Evidence from public school transportation in Louisiana. Journal of Private Enterprise.

  • Jax, C. (2008). Pupil transportation finance: report to the legislature. Unpublished report to the Minnesota state legislature. As of 05/01/09 available at: http://education.state.mn.us/mdeprod/groups/Finance/documents/Publication/000755.pdf.

  • Lazarus, S. S., & McCullough, G. J. (2005). The impact of outsourcing on efficiency in rural and nonrural school districts: the case of pupil transportation in Minnesota. The Journal of Regional Analysis and Policy, 35(1), 54–68.

    Google Scholar 

  • McGuire, R. A., Ohsfeldt, R. L., & van Cott, T. N. (1990). More on the choice between public and private production of a publicly funded service. Public Choice, 66(2), 189–194.

    Article  Google Scholar 

  • McGuire, R. A., & van Cott, T. N. (1984). Public versus private economic activity: a new look at school bus transportation. Public Choice, 43(1), 25–43.

    Article  Google Scholar 

  • Megginson, W. L., & Netter, J. M. (2001). From state to market: a survey of empirical studies on privatization. Journal of Economic Literature, 39(2), 321–389.

    Article  Google Scholar 

  • Office of the Legislative Auditor, State of Minnesota. (2008). Evaluation report: school district student transportation. Unpublished report from the Minnesota Office of the Legislative Auditor. January.

  • Richmond, J. (1992). The costs of contracted service: an assessment of assessments. MIT Center for Transportation Studies, July 20.

  • Ross, R. L. (1988). Government and the private sector. New York: Crane Russak and Co.

    Google Scholar 

  • Sclar, E. D. (2000). You don’t always get what you pay for: the economics of privatization. Ithaca: Cornell University Press.

    Google Scholar 

  • SEIU Local 284. (2007). Safe, from home to school: the need for student transportation reform in Minnesota. Unpublished policy brief.

Download references

Author information

Authors and Affiliations

  1. 4200 13th Ave South, Minneapolis, MN, 55410, USA

    Owen Thompson

Authors
  1. Owen Thompson
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Owen Thompson.

Additional information

As of fall 2009 the author is a doctoral student in the Department of Economics at the University of Massachusetts, Amherst. The majority of the research for this paper was conducted when the author was a masters student in the Hubert H. Humphrey Institute of Public Affairs at the University of Minnesota, Twin Cities.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Thompson, O. The estimated cost impact of privatizing student transportation in Minnesota school districts. Public Choice 146, 319–339 (2011). https://doi.org/10.1007/s11127-010-9592-y

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11127-010-9592-y

Keywords

Search

Navigation