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FISCAL INDEPENDENCE, SPILLOVERS, AND RESIDENTIAL CHOICE
Author(s) -
Schweizer Urs
Publication year - 1985
Publication title -
papers in regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.937
H-Index - 64
eISSN - 1435-5957
pISSN - 1056-8190
DOI - 10.1111/j.1435-5597.1985.tb00838.x
Subject(s) - urban agglomeration , independence (probability theory) , public good , economics , goods and services , central city , flattening , economic geography , economy , microeconomics , statistics , mathematics , materials science , composite material
Based on some empirical facts about the Swiss system of cities, this paper offers a model for agglomerations consisting of several fiscally independent communities. Every community provides its residents with local public goods produced at U‐shaped average cost curves. In addition, central cities supply their surrounding agglomerations with pure public goods and services. Due to fiscal inequivalence, suburban communities obtain a free ride from the central city. Within such a model, increased spending by central cities is shown to be the only cause for the observed flattening of density gradients.