Local Public Services Costs and the Geography of Development: Evidence From Florida Counties

Abstract

ABTRACT. Theory suggests that the spatial distribution of development within a local jurisdiction affects the costs of providing local public services. We use GINI coefficients to characterize these distributions at the county level and estimate the effects on real per capita expenditures from reductions in the spatial concentration of all buildings and nine alternative types of development. We also estimate the effect on expenditures from expansions in the developed area of a county. The results obtained from a panel of Florida counties confirm our theory and suggest that the geography of development within a county affects public services costs.

The Fiscal Impacts of Urban Sprawl: Evidence From U.S. County Areas

“…The problem appears to be confined to leapfrog development. Results from Ihlanfeldt and Willardsen () suggest the same. As development becomes more uniform across a county, public service costs are reduced.…”

“…However, within county changes in “compactness,” i.e., changes in compactness around a county specific mean, may also be important and their exclusion could bias the estimate of the global nonlinearity. Following Ihlanfeldt and Willardsen (), I use McIntosh and Schlenker's () hybrid solution, where the square of difference between development and its county specific mean is entered into the estimating equation ( in equation ). If the within nonlinearities are important, this strategy effectively eliminates the potential bias.…”

“…Following Ihlanfeldt and Willardsen (), I conduct a number of specification tests. First, I conduct joint tests of significance on the percent developed variables.…”

“…The results of this test confirm the joint significance of the county level fixed effects in all specifications from Table and . Lastly, testing for strict exogeneity by conducted a joint F‐test on t + 1 leading explanatory variables, as suggested by Ihlanfeldt and Willardsen (), is inconclusive for many of the specifications. This result suggests the potential for simultaneity bias; however, Wooldridge () contends the bias resulting from violating strict exogeneity in a long panel is minimal…”

“…Hortas‐Rico and Solé‐Ollé () get much closer to actually measuring this concept using the percentage of development that is scattered rather than compact. Similarly, Ihlanfeldt and Willardsen () measure the Gini coefficient of building structures. However, these are reasonably unique data sets.…”