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Welfare Analysis of the Number and Locations of Local Public Facilities

Marcus Berliant (), Shin-Kun Peng () and Ping Wang ()

No 35, Vanderbilt University Department of Economics Working Papers from Vanderbilt University Department of Economics

Abstract: We develop a discrete or finite household model with congestable local public goods where the level of provision, the number of facilities and their locations are all endogenously determined in a purely normative context. We prove the existence of an equal-treatment identical-provision second best optimum, where all households are required to reach the same utility level, the provision of local public good is required to be the same at all facilities, and all facilities must serve the same number of consumers. Such an optimal public facility configuration need not be geographically centralized even if there is only a single public facility site. Moreover, the optimal public facility configuration could be either concentrated (single site) or dispersed (multiple sites), depending crucially on the degree of congestability and the household valuation of local public goods as well as the unit transportation cost.

Keywords: Congestable local public goods; optimal public facility configurations (search for similar items in EconPapers)
JEL-codes: D61 H41 R13 (search for similar items in EconPapers)
Date: 2000-08
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http://www.accessecon.com/pubs/VUECON/vu00-w35.pdf First version, 2000 (application/pdf)

Related works:
Journal Article: Welfare analysis of the number and locations of local public facilities (2006) Downloads
Working Paper: Welfare Analysis of the Number and Locations of Local Public Facilities (2005) Downloads
Working Paper: Welfare Analysis of the Number and Locations of Local Public Facilities (2004) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:van:wpaper:0035

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