Economies of Scale in Local Government: A Theoretical Framework

William Fox

No 329886, Economics Statistics and Cooperative Services (ESCS) Reports from United States Department of Agriculture, Economic Research Service

Abstract: A conceptual model is developed for the purpose of providing a framework within which the existence of size economies can be tested. Based on the model the existing size economies literature is shown to be faulty on several counts. First, a simultaneous system of equations is shown to be necessary in order to test for size economies though most previous literature uses a single equation approach. Second, most previous studies have ignored capital costs which results in estimates of short run rather than long run cost curves. Also, the paper notes that care must be taken in application of size economies research to policy questions

Keywords: Community/Rural/Urban Development; Public Economics; Research Methods/Statistical Methods (search for similar items in EconPapers)
Pages: 56
Date: 1978-05
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uerscs:329886

DOI: 10.22004/ag.econ.329886

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