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Efficient Structure of Provision for Emergency Public Services

Published online by Cambridge University Press:  17 August 2016

Elena Inarra
Affiliation:
Department of Economic Analysis, Basque Country University
Ana Mauleon
Affiliation:
Department of Economic Analysis, Basque Country University
Vincent Vannetelbosch
Affiliation:
Institute of Public Economics, Basque Country University
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Summary

We consider an economy in which a central government has to decide on the provision and location of an emergency public service the quality of which diminishes with distance. The emergency service has to attend a group of municipalities geographically located in a star-tree-graph. We derive the optimal location and provision, as well as the Lindahl prices for the emergency service. Also, we determine the minimum quality of service that makes efficient the existence of a unique provider for the whole economy. Conversely, given any level of quality of service we identify the stable and efficient structure of provision.

Nous considérons une économie au sein de laquelle un gouvernement central décide l’approvisionnement et la location d’un service public de secours (pompiers, ambulance... ) dont la qualité du service diminue avec la distance. Le service de secours dessert un ensemble de municipalités géographiquement localisées dans un graphe en forme d’étoile. Nous dérivons l’approvisionnement et la location optimal, ainsi que les prix de Lindahl pour le service en question. Ensuite, nous déterminons la qualité minimale du service qui garantit l’efficacité d’un unique centre de secours desservant l’économie entière. Réciproquement, pour chaque niveau de qualité du service, nous identifions la structure d’approvisionnement stable et efficace.

Type
Research Article
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1999 

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Footnotes

(*)

We wish to thank two anonymous referees for helpful comments and suggestions. This paper has been presented at the University of Istambul, University Autonoma de Barcelona, XI Jornadas de Economía Industrial (Madrid). This research has been supported by: UPV 035.321-HB146/96, DGICYT PB94-1372. The research of Vincent Vannetelbosch has been made possible by a fellowship of the Basque Country government.

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