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Swimming pool versus art museum: Efficiency in the provision of local public facilities with heterogeneity

Author

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  • Jiun-Nan Ou

    (National Taipei University of Business)

Abstract

This paper follows an approach adopted by Cremer, Marchand and Pestieau (1997) to analyze efficiency in the provision of heterogeneous local public facilities. Even when spillovers exist, under certain conditions the local government could still reach the optimum provision of the local public good, otherwise there is under-provision. Secondly, relaxing the non-excludability assumption, provision efficiency could be achieved if the local governments collect the service fees based on the neighboring community user’s net marginal willingness to pay. If not, the service fee mechanism would not always be able to eliminate the preexisting allocation inefficiency and could sometimes lead to increased inefficiency due to overprovision of the public good.

Suggested Citation

  • Jiun-Nan Ou, 2016. "Swimming pool versus art museum: Efficiency in the provision of local public facilities with heterogeneity," Journal of Applied Economics, Universidad del CEMA, vol. 19, pages 383-400, November.
    • Handle: RePEc:cem:jaecon:v:19:y:2016:n:2:p:383-400
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    More about this item

    Keywords

    local public good; public facility; spillovers;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis

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