Student achievement, cost, rural context, and qualitative differences relative to small/rural schools were analyzed in Alberta to address the choice between small elementary school construction and school consolidation with student busing. Studies in both the United States and Canada have found no consistant significant differences in student achievement between small and large schools. There is a major difference in cost and funding levels, however. Small school government grants do not offset this difference. Despite their greater cost, the number of small schools increased from 208 to 520 between 1974 and 1983. Busing for small schools costs less than for large schools which involve greater distances. A "bus or build" computer model for urban applications could be adapted to help school boards make cost effective small school/large consolidated school construction decisions. Given the quality and popularity of smaller schools in rural contexts, Alberta Education should research ways to reduce small school costs. Along with the narrative are descriptive charts and figures including an analysis of qualitative advantages and disadvantages of small schools. Following the narrative are four appendices with copies of graphs and tables from studies cited in the text and a bibliography. (PM)