Operating cost of public services and city size

Abstract

Many studies have shown that some factors related to city population such as the economies or diseconomies of scale, the variations in the urban pattern linked to the city size, the special conditions of the urban environment in large cities or the changes in the level of service directly impact on the unit operating cost of urban public services. However, research has not been able to isolate their real influence, or even in what direction they work. As a result, the relationship between the city population and the unit operating cost of their public services remains unclear: some authors state that the unit operating cost of public services decreases when the population increases; others that it increases or that it follows a U-shaped function with an optimal city size. For a sample of 4875 Spanish municipalities, the combined analysis of per-capita and per-unit of infrastructure expenditure ratios has allowed us to delve into the central role of two of the aforementioned factors: the level of service and the urban pattern. Thus, for the services of public lighting, water supply, sewage and sanitation, waste collection and disposal, parks and pavement maintenance and street cleaning, higher levels of per-capita spending have been found both in municipalities with under 1000 and above 50 000 residents. However, in the smallest municipalities, the higher level of spending per resident is boosted by a less-compact urban pattern, while in the largest cities, the reason would be a better level of service.