Consolidation is caused mostly do to schools that can no longer field teams and therefore parents pull their kids out and start sending them to other schools that can field a team. The economics kicks in because the school loses funding for those kids after they have left.
I saw it happen at Harmony, losing kids, primarily because of lack of competitive teams and numbers, and it's occurring now at Seymour, which has lost at least 7 high school age kids to rival schools because of lack of players and the threat of not fielding a teams in the future. The worst part in both cases it was the better athletes that left both Harmony, and now Seymour and are starting at schools like Wayne, Moravia and Centerville.
You lose the kids because of sports and then you lose the money that the state provides for them which is the economic part. It's the chicken and