Agglomeration, Population Size, and the Cost of Providing Public Services : An Empirical Analysis for German States

Büttner, Thiess ; Schwager, Robert ; Stegarescu, Dan

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URN: urn:nbn:de:bsz:180-madoc-1137
Document Type: Working paper
Year of publication: 2004
The title of a journal, publication series: None
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: H73 H72 H41 ,
Subject headings (SWD): Länder , Einwohnerzahl , Bevölkerungsdichte , Öffentliche Ausgaben
Abstract: This paper is concerned with the question as to what extent population size and density affect the cost of providing public services at the subnational level. Empirical estimates of cost functions are obtained from an analysis of the expenditures of German states disaggregated into about 40 functions of government. The empirical results indicate that generally there is no significant relationship between population density and the cost of public goods. At the same time, cost are almost proportionately related to population size indicating that goods and services provided by the German states display only a limited degree of publicness.
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