The Impact of Population Density on Municipal Government Expenditures

Data from 487 municipal governments with populations greater than 50,000 are examined to see the relationship between population density and per capita government expenditures. There is no statistically significant relationship between per capita total government expenditures and operational expenditures for cities smaller than 500,000, and for larger cities, higher population density is associated with higher per capita government expenditures. Infrastructure expenditures tend to decline with increases in population density for cities smaller than 500,000, whereas expenditures on services tend to increase with population density for cities larger than 500,000. The relationship between per capita total expenditures and population density has policy relevance because it indicates that when all government expenditures are taken into account, policies that increase population density will not reduce per capita government expenditures and, in larger cities, will lead to higher per capita government expenditures.