An analysis of returns to scale in public production, with an application to fire protection

William Duncombe, John Yinger

Research output: Contribution to journalArticle

55 Scopus citations

Abstract

This paper analyzes returns to scale in public production. Existing studies fail to differentiate among three dimensions of scale: service quality, the level of governmental activity, and the number of people served. A fourth dimension, economies of scope, is need for agencies that provide multiple services. This paper provides a formal definition of returns to scale for each dimension. This framework is applied to fire protection, using a translog cost function with two services, fire prevention and fire suppression. The results indicate economies of scope, increasing returns to quality scale, and constant returns to population scale.

Original languageEnglish (US)
Pages (from-to)49-72
Number of pages24
JournalJournal of Public Economics
Volume52
Issue number1
DOIs
StatePublished - Aug 1993

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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