IDEAS home Printed from https://ideas.repec.org/p/sin/wpaper/04-a011.html
   My bibliography  Save this paper

Welfare Analysis of the Number and Locations of Local Public Facilities

Author

Listed:

Abstract

We develop a discrete or finite household model with congestable local public goods where the level of provision, the number of facilities and their locations are all endogenously determined in a purely normative context. We prove the existence of an equal-treatment identical-provision second best optimum, 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 or may not be geographically centralized if there is only a single public facility site. Moreover, the optimal public facility configuration could be either concentrated (single site) or dispersed (multiple sites), depending crucially on the degree of congestability and the household valuation of the local public good as well as the commuting cost.

Suggested Citation

  • Marcus Berliant & Shin-Kun Peng & Ping Wang, 2004. "Welfare Analysis of the Number and Locations of Local Public Facilities," IEAS Working Paper : academic research 04-A011, Institute of Economics, Academia Sinica, Taipei, Taiwan.
  • Handle: RePEc:sin:wpaper:04-a011
    as

    Download full text from publisher

    File URL: http://www.econ.sinica.edu.tw/upload/file/04-a011.2008090210080489.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. 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.
    2. Conley, John P. & Wooders, Myrna H., 2001. "Tiebout Economies with Differential Genetic Types and Endogenously Chosen Crowding Characteristics," Journal of Economic Theory, Elsevier, vol. 98(2), pages 261-294, June.
    3. Brueckner, Jan K., 1979. "Equilibrium in a system of communities with local public goods : A diagrammatic exposition," Economics Letters, Elsevier, vol. 2(4), pages 387-393.
    4. 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.
    5. 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.
    6. 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.
    7. Ellickson, Bryan & Grodal, Birgit & Scotchmer, Suzanne & Zame, William R., 2001. "Clubs and the Market: Large Finite Economies," Journal of Economic Theory, Elsevier, vol. 101(1), pages 40-77, November.
    8. Tjalling C. Koopmans & Martin J. Beckmann, 1955. "Assignment Problems and the Location of Economic Activities," Cowles Foundation Discussion Papers 4, Cowles Foundation for Research in Economics, Yale University.
    9. Ellickson, Bryan, 1979. "Competitive equilibrium with local public goods," Journal of Economic Theory, Elsevier, vol. 21(1), pages 46-61, August.
    10. Shin-Kun Peng, 1996. "The location of governmental facilities and equilibrium urban configuration," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 30(3), pages 247-272.
    11. Hochman, Oded, 1982. "Congestable local public goods in an urban setting," Journal of Urban Economics, Elsevier, vol. 11(3), pages 290-310, May.
    12. Wang, Ping, 1990. "Competitive equilibrium formation of marketplaces with heterogeneous consumers," Regional Science and Urban Economics, Elsevier, vol. 20(3), pages 295-304, November.
    13. 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 1753-1765, November.
    14. 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.
    15. Richard J. Arnott & Joseph E. Stiglitz, 1979. "Aggregate Land Rents, Expenditure on Public Goods, and Optimal City Size," The Quarterly Journal of Economics, Oxford University Press, vol. 93(4), pages 471-500.
    16. Hochman, O. & Pines, D., 1997. "On the Agglomeration of Non-Residential Activities in an Urban Area," Papers 34-97, Tel Aviv.
    17. Berliant, Marcus & ten Raa, Thijs, 1994. "Regional science: The state of the art," Regional Science and Urban Economics, Elsevier, vol. 24(5), pages 631-647, October.
    18. 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 535-566, August.
    19. Fujita, Masahisa, 1986. "Optimal location of public facilities : Area dominance approach," Regional Science and Urban Economics, Elsevier, vol. 16(2), pages 241-268, May.
    20. 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.
    21. Berliant, Marcus, 1985. "Equilibrium models with land : A criticism and an alternative," Regional Science and Urban Economics, Elsevier, vol. 15(2), pages 325-340, June.
    22. 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.
    23. Lucas, Robert Jr., 1990. "Liquidity and interest rates," Journal of Economic Theory, Elsevier, vol. 50(2), pages 237-264, April.
    24. 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.
    25. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tajibaeva, Liaila & Haight, Robert G. & Polasky, Stephen, 2008. "A discrete-space urban model with environmental amenities," Resource and Energy Economics, Elsevier, vol. 30(2), pages 170-196, May.
    2. Marco Brambilla & Alessandra Michelangeli & Eugenio Peluso, 2013. "Equity in the City: On Measuring Urban (Ine)quality of Life," Urban Studies, Urban Studies Journal Limited, vol. 50(16), pages 3205-3224, December.
    3. Shu, Hui & Xiong, Ping-ping, 2019. "Reallocation planning of urban industrial land for structure optimization and emission reduction: A practical analysis of urban agglomeration in China’s Yangtze River Delta," Land Use Policy, Elsevier, vol. 81(C), pages 604-623.
    4. Junlae Kim & Seiyong Kim, 2020. "The Impact of Population Characteristics and Government Budgets on the Sustainability of Public Buildings in Korea’s Regional Cities," Sustainability, MDPI, vol. 12(14), pages 1-15, July.
    5. Sun, Weizeng & Guo, Dongmei & Li, Qiang & Fang, Haidong, 2021. "School runs and urban traffic congestion: Evidence from China," Regional Science and Urban Economics, Elsevier, vol. 86(C).
    6. 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.
    7. 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.
    8. Dokow, Elad & Luque, Jaime, 2019. "Provision of local public goods in mixed income communities," Journal of Housing Economics, Elsevier, vol. 45(C), pages 1-1.
    9. Ana Opris & Tomislav Kandzija, 2020. "Public Facilities Assessment Methodology," Postmodern Openings, Editura Lumen, Department of Economics, vol. 11(4), pages 64-78, December.
    10. Jiwu Wang & Xuewei Hu & Chengyu Tong, 2021. "Urban Community Sustainable Development Patterns under the Influence of COVID-19: A Case Study Based on the Non-Contact Interaction Perspective of Hangzhou City," Sustainability, MDPI, vol. 13(6), pages 1-20, March.
    11. Shin-Kun Peng, 2014. "Housing Market and Agglomeration of Rent-Seeking Activities: Implications for Regional Development," ERSA conference papers ersa14p326, European Regional Science Association.
    12. Gabriel Loumeau, 2021. "Locating Public Facilities: Theory and Micro Evidence from Paris," CESifo Working Paper Series 8908, CESifo.
    13. Picard, P.M. & Tran, T.T.H., 2021. "Small urban green areas," Journal of Environmental Economics and Management, Elsevier, vol. 106(C).
    14. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shin‐Kun Peng & Ping Wang, 2005. "Sorting by foot: ‘travel‐for’ local public goods and equilibrium stratification," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 38(4), pages 1224-1252, November.
    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. Marcus Berliant & Yves Zenou, 2014. "Labor Differentiation and Agglomeration in General Equilibrium," International Regional Science Review, , vol. 37(1), pages 36-65, January.
    4. Berliant, M. & Ten Raa, T., 2003. "Increasing returns to scale and perfect competition : The role of land," Other publications TiSEM c4f1929e-6651-4959-b757-4, Tilburg University, School of Economics and Management.
    5. Berliant, Marcus & ten Raa, Thijs, 2003. "Increasing returns and perfect competition: the role of land," Journal of Urban Economics, Elsevier, vol. 54(2), pages 339-367, September.
    6. Berliant, Marcus & Dunz, Karl, 2004. "A foundation of location theory: existence of equilibrium, the welfare theorems, and core," Journal of Mathematical Economics, Elsevier, vol. 40(5), pages 593-618, August.
    7. Berliant, Marcus & Konishi, Hideo, 2000. "The endogenous formation of a city: population agglomeration and marketplaces in a location-specific production economy," Regional Science and Urban Economics, Elsevier, vol. 30(3), pages 289-324, May.
    8. Berliant, Marcus, 2007. "Prospects for a unified urban general equilibrium theory," Regional Science and Urban Economics, Elsevier, vol. 37(4), pages 466-471, July.
    9. Abdel-Rahman, Hesham M. & Wang, Ping, 1997. "Social Welfare and Income Inequality in a System of Cities," Journal of Urban Economics, Elsevier, vol. 41(3), pages 462-483, May.
    10. Dokow, Elad & Luque, Jaime, 2019. "Provision of local public goods in mixed income communities," Journal of Housing Economics, Elsevier, vol. 45(C), pages 1-1.
    11. Berliant, Marcus & Fujita, Masahisa, 2019. "Evil deeds in urban economics," MPRA Paper 95614, University Library of Munich, Germany.
    12. Konishi, Hideo, 2008. "Tiebout's tale in spatial economies: Entrepreneurship, self-selection, and efficiency," Regional Science and Urban Economics, Elsevier, vol. 38(5), pages 461-477, September.
    13. Berliant, Marcus & Sabarwal, Tarun, 2008. "When worlds collide: Different comparative static predictions of continuous and discrete agent models with land," Regional Science and Urban Economics, Elsevier, vol. 38(5), pages 438-444, September.
    14. André Grimaud, 1996. "Modèle continu et modèle discret en économie urbaine," Revue Économique, Programme National Persée, vol. 47(2), pages 289-309.
    15. Jaime Luque, 2014. "Wages, local amenities and the rise of the multi-skilled city," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(2), pages 457-467, March.
    16. Gilles Duranton, 1997. "La nouvelle économie géographique : agglomération et dispersion," Économie et Prévision, Programme National Persée, vol. 131(5), pages 1-24.
    17. Marcus Berliant & John H. Y. Edwards, 2004. "Efficient Allocations in Club Economies," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 6(1), pages 43-63, February.
    18. Gabriel Loumeau, 2021. "Locating Public Facilities: Theory and Micro Evidence from Paris," CESifo Working Paper Series 8908, CESifo.
    19. Dimitrios Xefteris & Nicholas Ziros, 2014. "A Spatial Model of Perfect Competition," University of Cyprus Working Papers in Economics 05-2014, University of Cyprus Department of Economics.
    20. Abdel-Rahman, Hesham M. & Wang, Ping, 1995. "Toward a general-equilibrium theory of a core-periphery system of cities," Regional Science and Urban Economics, Elsevier, vol. 25(4), pages 529-546, August.

    More about this item

    Keywords

    Congestable Local Public Goods; Optimal Public Facility Configurations;

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sin:wpaper:04-a011. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/sinictw.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: HsiaoyunLiu (email available below). General contact details of provider: https://edirc.repec.org/data/sinictw.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.