Michael Reiter, Universitat Pompeu Fabra, Barcelona
Are Public Goods Public?
A Critical Survey of the Demand Estimates for Local Public Services
(with Alfons J. Weichenrieder)
Abstract
Economies of scale are an important textbook rationale for regulation and government provision of
services. The present paper surveys the empirical literature on economies of scale in the consumption of
local public services. The majority of studies invoke the median voter model to estimate demand for
local public services and reject scale economies. The paper discusses the methodological problems of
this literature in detail and comments on the policy relevance of the results.