Faculty of Economics and Business Administration Publications Database

Are Public Goods Public? A Critical Survey of the Demand Estimates for Local Public Services

Reiter, Michael
Volume: 54
Number: 3
Pages: 374 - 408
ISSN-Print: 0015-2218
Year: 1997
Abstract: Economies of scale are an important textbook rationale for regulation and government provision of services. The present paper surveys the empirical literature on economies of scale in the consumption of local public services. The majority of studies invoke the median voter model to estimate demand for local public services and reject scale economies. The paper discusses the methodological problems of this literature in detail and comments on the policy relevance of the results.