Fire department demand and supply in large cities

The purpose of this study is to estimate demand and production functions for fire fighters provided in major cities. Several factors, including the level of fire losses in the communityper capitaincome, relative wages of fire fighters, population density, city size, and poverty are used in the analysis.

This study differs from earlier ones in two ways. First, multiple measures of community fire losses, instead of the usual one, are used in the analysis. Second, in contrast with earlier studies of fire protection which have typically relied on ordinary least squares regression analysis (OLS) to study either demand or production, this study employs two stage least squares regression analysis (2SLS) to simultaneously estimate demand and production relations.

Evidence is found that demand for fire fighting is affected by both fire losses and relative size of per capitaincome to fire fighter wages. Losses, in turn, are affected by fire fighting hours, by poverty and by density. There is some evidence for economies of scale. The results were consistently found for the variety of loss measures used. The 2SLS results indicated that, as expected, there are simultaneous effects occurring in demand and supply.