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

21 Pages Posted: 27 May 2004 Last revised: 14 Aug 2008

See all articles by Thiess Buettner

Thiess Buettner

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg; CESifo (Center for Economic Studies and Ifo Institute)

Robert Schwager

Center for European Economic Research (ZEW); University of Magdeburg

Dan Stegarescu

Center for European Economic Research (ZEW)

Date Written: 2004

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.

Keywords: agglomeration, cost of public services, local public goods

JEL Classification: H72, H73, H41

Suggested Citation

Buettner, Thiess and Schwager, Robert and Stegarescu, Dan, Agglomeration, Population Size, and the Cost of Providing Public Services: An Empirical Analysis for German States (2004). ZEW - Centre for European Economic Research Discussion Paper No. 04-018, Available at SSRN: https://ssrn.com/abstract=550781 or http://dx.doi.org/10.2139/ssrn.550781

Thiess Buettner (Contact Author)

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg ( email )

Lange Gasse 20
Nürnberg, Bavaria 90403
Germany

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Robert Schwager

Center for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany
00 49 621 1235160 (Phone)
00 49 621 1235215 (Fax)

University of Magdeburg

Universitätspl. 2
PSF 4120
Magdeburg, D-39106
Germany

Dan Stegarescu

Center for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany
+49 621 1235 167 (Phone)
+49 621 1235 215 (Fax)

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