Efficient provision of local public goods in urban economies

This research provides a theoretical study of the efficient provision of public goods in a spatial context. The study contains a review of the literature and three models of public goods provision. In the first model I study the efficient provision of public goods with differentiation by competing communities. Local governments collect land rents from all households to cover the costs of the public goods. The competition among communities forces them to provide the goods efficiently. In each community, the competition in the land market forces households to reveal their value for the public goods. I also analyze the efficient amount of differentiation and each type of public good provided relative to congestion levels of consumption. In the second model I analyze the equilibrium conditions for the existence of mixed income cities. In this model I consider a closed economy consisting of a system of cities. Each city is assumed to be formed by a developer. Equilibrium conditions are presented for three configurations: pure homogeneous income cities, pure mixed income cities, and combined mixed income cities. The third model deals with equilibrium location of public facilities in a duopoly structure. For a large area and low congestion levels equilibrium configurations can exist where both facilities locate symmetric from the center and their market areas do not overlap. For an intermediate size area there is an equilibrium configuration that is not agglomeration at the center even with overlapping market areas. For a small area and high congestion levels the equilibrium location of the facilities is agglomeration at the center