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Welfare Analysis of the Number and Locations of Local Public Facilities

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Author Info

  • Marcus Berliant

    (Washington University in St. Louis)

  • Shin-Kun Peng

    (Academia Sinica & National Taiwan University)

  • Ping Wang

    (Washington University in St. Louis & NBER)

Abstract

We develop a model with a finite number of households and congestable local public goods where the level of provision, the number of facilities and their locations are all endogenously determined. We prove that an equal-treatment identical-provision second-best optimum exists, 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 may be concentrated (single site) or dispersed (multiple sites), depending on congestability, commuting cost and the household preference parameters.

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File URL: http://128.118.178.162/eps/pe/papers/0407/0407015.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Public Economics with number 0407015.

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Length: 39 pages
Date of creation: 29 Jul 2004
Date of revision: 20 Jul 2005
Handle: RePEc:wpa:wuwppe:0407015

Note: Type of Document - pdf; pages: 39
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Web page: http://128.118.178.162

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Keywords: Congestable Local Public Goods; Optimal Public Facility Configurations;

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References

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  1. Thisse, Jacques-Francois & Wildasin, David E., 1992. "Public facility location and urban spatial structure : Equilibrium and welfare analysis," Journal of Public Economics, Elsevier, vol. 48(1), pages 83-118, June.
  2. Berliant, Marcus & Peng, Shin-Kun & Wang, Ping, 2006. "Welfare analysis of the number and locations of local public facilities," Regional Science and Urban Economics, Elsevier, vol. 36(2), pages 207-226, March.
  3. Shin-Kun Peng, 1996. "The location of governmental facilities and equilibrium urban configuration," The Annals of Regional Science, Springer, vol. 30(3), pages 247-272.
  4. Asami, Y. & Fujita, M. & Smith, T. E., 1991. "On the foundations of land use theory : Discrete versus continuous populations," Regional Science and Urban Economics, Elsevier, vol. 20(4), pages 473-508, February.
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  6. Berliant, Marcus & Wang, Ping, 1993. "Endogenous formation of a city without agglomerative externalities or market imperfections : Marketplaces in a regional economy," Regional Science and Urban Economics, Elsevier, vol. 23(1), pages 121-144, March.
  7. Lucas, Robert Jr., 1990. "Liquidity and interest rates," Journal of Economic Theory, Elsevier, vol. 50(2), pages 237-264, April.
  8. Hochman, Oded, 1982. "Congestable local public goods in an urban setting," Journal of Urban Economics, Elsevier, vol. 11(3), pages 290-310, May.
  9. Raa, M.H. ten & Berliant, M., 1994. "Regional science: The state of the art," Open Access publications from Tilburg University urn:nbn:nl:ui:12-381939, Tilburg University.
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  11. Wildasin, David E., 1987. "Theoretical analysis of local public economics," Handbook of Regional and Urban Economics, in: E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 2, chapter 29, pages 1131-1178 Elsevier.
  12. Berliant, Marcus & Fujita, Masahisa, 1992. "Alonso's Discrete Population Model of Land Use: Efficient Allocations and Competitive Equilibria," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 33(3), pages 535-66, August.
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  14. Raa, M.H. ten & Berliant, M., 1991. "On the continuum approach of spatial and some local public goods or product differentiation models," Open Access publications from Tilburg University urn:nbn:nl:ui:12-381947, Tilburg University.
  15. Bergstrom, Theodore C & Cornes, Richard C, 1983. "Independence of Allocative Efficiency from Distribution in the Theory of Public Goods," Econometrica, Econometric Society, vol. 51(6), pages 1753-65, November.
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  18. Berliant, Marcus & Papageorgiou, Yorgos Y. & Wang, Ping, 1990. "On welfare theory and urban economics," Regional Science and Urban Economics, Elsevier, vol. 20(2), pages 245-261, September.
  19. Scotchmer, Suzanne, 1986. "Local public goods in an equilibrium : How pecuniarv externalities matter," Regional Science and Urban Economics, Elsevier, vol. 16(4), pages 463-481, November.
  20. Berliant, Marcus & ten Raa, Thijs, 1991. "On the continuum approach of spatial and some local public goods or product differentiation models: Some problems," Journal of Economic Theory, Elsevier, vol. 55(1), pages 95-120, October.
  21. Hochman, O. & Pines, D., 1997. "On the Agglomeration of Non-Residential Activities in an Urban Area," Papers 34-97, Tel Aviv.
  22. Revelle, Charles, 1987. "Urban public facility location," Handbook of Regional and Urban Economics, in: E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 2, chapter 27, pages 1053-1096 Elsevier.
  23. Wang, Ping, 1990. "Competitive equilibrium formation of marketplaces with heterogeneous consumers," Regional Science and Urban Economics, Elsevier, vol. 20(3), pages 295-304, November.
  24. Fujita, Masahisa, 1986. "Optimal location of public facilities : Area dominance approach," Regional Science and Urban Economics, Elsevier, vol. 16(2), pages 241-268, May.
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Citations

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Cited by:
  1. Marcus Berliant & Shin-kun Peng & Ping Wang, 2000. "Welfare Analysis of the Number and Locations of Local Public Facilities," Vanderbilt University Department of Economics Working Papers 0035, Vanderbilt University Department of Economics.
  2. Shin-Kun Peng & Ping Wang, 2003. "Sorting by Foot: Consumable Travel-for Local Public Good and Equilibrium Stratification," IEAS Working Paper : academic research 03-A008, Institute of Economics, Academia Sinica, Taipei, Taiwan.
  3. Chen, Been-Lon & Peng, Shin-Kun & Wang, Ping, 2009. "Intergenerational human capital evolution, local public good preferences, and stratification," Journal of Economic Dynamics and Control, Elsevier, vol. 33(3), pages 745-757, March.
  4. Tajibaeva, Liaila & Haight, Robert G. & Polasky, Stephen, 2003. "A Discrete Space Urban Model With Environmental Amenities," 2003 Annual meeting, July 27-30, Montreal, Canada 21907, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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