EconPapers    
Economics at your fingertips  
 

Strategical interactions on municipal public safety spending with correlated private information

Chao Yang and Lung-Fei Lee ()

Regional Science and Urban Economics, 2018, vol. 72, issue C, 86-102

Abstract: We investigate interactions of public safety spending among spatially related local jurisdictions in a framework of simultaneous move game both theoretically and empirically. Incorporating the mobility of residents and externality of public safety services, it is found that the public safety spending of a municipal government can be negatively related to those of its neighbors, which is empirically supported by a general interaction model with correlated private information using the data on municipalities in North Carolina. In this case, strategic interactions induce a reduction of municipal public safety spending by 7.2404% on average and a local government will reduce its own spending by 0.0927 million dollars when one of its neighbors is expected to increase public safety spending by 1 million dollars, showing strong “free-riding” effects.

Keywords: Spatial correlation; Strategic interactions; Public finance; Fixed point; Numerical approximation (search for similar items in EconPapers)
JEL-codes: C31 C35 C57 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0166046216302629
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:72:y:2018:i:c:p:86-102

Access Statistics for this article

Regional Science and Urban Economics is currently edited by D.P McMillen and Y. Zenou

More articles in Regional Science and Urban Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-09-29
Handle: RePEc:eee:regeco:v:72:y:2018:i:c:p:86-102