Local public goods, property values, and local public choice |
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Authors: | David E Wildasin |
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Institution: | Department of Economics, University of Illinois at Chicago Circle, Chicago, Illinois 60680 USA |
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Abstract: | This paper examines the relationship between the benefits and costs of local public good provision and local property values within the context of the Koopmans-Beckmann-Gale location-assignment model. Property values do not in general measure accurately the marginal net benefits of local public goods; special conditions sufficient for property values to measure or bound the marginal net benefits are stated, however. In addition, it is shown that under certain circumstances, households vote for property-value-enhancing levels of local expenditures. Under these conditions, a political equilibrium produces a Lindahl solution to the local public good problem. |
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