| Chapter 1: | Introduction |
Unless otherwise indicated, we used municipal-level data from the 2002 Census of Governments to investigate the potential economies of scale in local government services. The Census of Governments contains data on the number of employees and the total expenditures for various government functions.
For the analysis of G-inefficiency, we used data for county areas from the 2002 Census of Governments augmented with other census data (unless otherwise indicated). These data contain information on employment and expenditures aggregated for all local governments within the county.
Estimates for Functional Areas
In chapter 5, we examine public safety. For the economies-of-scale models, in order to capture the differences that are inherent in cities of different sizes, we have provided separate estimates for municipalities with populations less than 25,000, populations of 25,000 to 50,000, and populations greater than 50,000. For the efficiency models, we used data for county areas, based on local government data aggregated to the county level. The bulk of the data that we used is from the 2002 Census of Governments.
For police and fire employment, our estimates suggest that for small municipalities (population < 25,000) in the Midwest, consolidation would result in lower staffing levels for police and fire personnel but not in lower expenditures, suggesting that the consolidation of police or fire functions across jurisdictions would not lead to savings in municipalities of this size. We found no evidence of economies of scale for police or fire services in larger municipalities (population > 25,000). The results for the South and Southwest were not consistently significant. Overall, our results suggest that there are significant differences in spending patterns among states and regions.
The models that we used to examine G-inefficiencies focused on the relationship between expenditures per capita for various government services in a county area and the number of local government units in each