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Demand for Local Public Services Revisited: the Case of Fire Protection

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  • William D. Duncombe

    (Syracuse University)

Abstract

This article estimates a more general demand function for local fire services simultaneously with a flexible cost function. Besides the standard income and price variables, the demand model includes estimates of marginal cost, tax exporting, and debt financing. Using these results, it is possible to reject several of the common assumptions about public sector technology and costs made in past demand re search. When the estimates of the demand model proposed in this study are compared to a standard expenditure demand model, there are major differences. In particular, the elasticity with respect to median income was found to be significantly higher using the more general model, which suggests that misspecification of the demand function may partially account for previous findings of a "flypaper effect."

Suggested Citation

  • William D. Duncombe, 1991. "Demand for Local Public Services Revisited: the Case of Fire Protection," Public Finance Review, , vol. 19(4), pages 412-436, October.
    • Handle: RePEc:sae:pubfin:v:19:y:1991:i:4:p:412-436
    DOI: 10.1177/109114219101900403
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    References listed on IDEAS

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    Cited by:

    1. Brunner, Eric J. & Ross, Stephen L., 2010. "Is the median voter decisive? Evidence from referenda voting patterns," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 898-910, December.
    2. Douglas C. Bice & William H. Hoyt, 1997. "The Impact of Mandates and Tax Limits on Voluntary Contributions to Local Public Services: An Application to Fire Protection Services," Public Economics 9704002, University Library of Munich, Germany.
    3. Eric J. Brunner & Stephen L. Ross, 2007. "How Decisive Is the Decisive Voter?," Working papers 2007-28, University of Connecticut, Department of Economics, revised Aug 2008.
    4. Albert Solé-Ollé, 2001. "Budget spillovers in a metropolitan area: typology and empirical evidence," Working Papers 2001/5, Institut d'Economia de Barcelona (IEB).
    5. Brunet, Alexia & McNamara, Kevin T. & Deboer, Larry, 2001. "Alternative Service Delivery Strategies For Local Governments," 2001 Annual meeting, August 5-8, Chicago, IL 20705, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Albert Solé-Ollé, 2001. "Budget spillovers in a metropolitan area: typology and empirical evidence," Working Papers 2001/5, Institut d'Economia de Barcelona (IEB).

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