Optimal scale of a public elementary school with commuting costs—a case study of Taipei county

Abstract

This study demonstrates the importance of commuting costs while determining the optimal school scale. It is found that, without commuting costs, the elementary schools in Taipei county are characterized by increasing returns to scale, and that the average public cost curve is L-shaped. However, ignoring the costs of commuting implies that the larger the school scale, the lower the cost to the public. Introducing commuting costs will raise the average cost curve, and reshape the L-shaped curve into a U-shaped curve. Once the average cost curve is U-shaped, the optimal scale of operations will lie at the lowest point.