Efficient Structure of Provision for Emergency Public Services
We consider an economy in which a central government has to decide on the provision and location of an emergency public service the quality of which diminishes with distance. The emergency service has to attend a group of municipalities geographically located in a star-tree-graph. We derive the optimal location and provision, as well as the Lindahl prices for the emergency service. Also, we determine the minimum quality of service that makes efficient the existence of a unique provider for the whole economy. Conversely given any level of quality of service we identify the stable and efficient structure of provision.
|Date of creation:||01 Mar 1999|
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