Local Infrastructures and Externalities: Does the Size Matter?

Massimiliano Ferraresi (), Umberto Galmarini () and Leonzio Rizzo ()
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Umberto Galmarini: University of Insubria, Italy

Working papers from Società Italiana di Economia Pubblica

Abstract: We setup a model in which the residents of two neighboring municipalities can use the services provided by public infrastructures located in both jurisdictions. If services are either complements or substitutes in use, the municipalities strategically interact when investing in infrastructures; moreover, when they differ in population size, the small municipality reacts more to the expenditure of its neighbor than the big one. The theoretical predictions are then tested by estimating the determinants of the stock of public infrastructures of the municipalities belonging to the Autonomous Province of Trento, in Italy.

Keywords: local public goods spillovers; spatial interactions; size of local jurisdictions (search for similar items in EconPapers)
JEL-codes: D72 H61 H77 (search for similar items in EconPapers)
Date: 2014-12
New Economics Papers: this item is included in nep-ure
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