Public output demands from alternative congestion functions
Article Abstract:
Three alternatives to the Bergstrom and Goodman - Borcherding and Deacon (BG-BD) specification of the congestion function are proposed. The BG-BD model measures the publicness or congestion parameter of local public goods. However, the model assumes diminishing marginal and a constant elasticity of congestion. The BG-BD model is thus contrasted with a flexible exponential specification and another which assumes data-dependent decreasing or increasing marginal congestion. The BG-BD and the exponential models yielded elasticities of order -1, while the last indicated less congestion and even increasing returns. The BG-BD specification fits the data best. The results indicate that diminishing marginal congestion is more likely, despite arguments to the contrary.
Publication Name: Journal of Urban Economics
Subject: Government
ISSN: 0094-1190
Year: 1993
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Pigou, Tiebout, property taxation, and the underprovision of local public goods: comment
Article Abstract:
The paper of Zodrow and Mieszkowski (1986) which was published by the Journal of Urban Economics presents a model where alleged 'tax competition' among the independent governments of a federation leads to lower-than-optimal tax rates and public service levels. However, one of the assumptions used by Zodrow and Mieszkowski is problematic. It does not have the meaning that the two assigned to it and a more intuitive result is obtained if this assumption is relaxed. Local taxes and spending levels may be either excessively high or excessively low when local business benefits from spending. Because the Zodrow and Mieszkowski model has become the accepted framework for addressing tax competition issues, it is important to consider this point.
Publication Name: Journal of Urban Economics
Subject: Government
ISSN: 0094-1190
Year: 1995
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