Fiscal stress and the production of public safety: A distance function approach

https://doi.org/10.1016/0047-2727(94)01445-TGet rights and content

Abstract

Faced with increasing crime rates, but nonincreasing budgets, local governments are seeking cost saving means of providing public safety. This paper investigates a bureaucracy's response to fiscal stress as well as its ability to efficiently substitute civilian for uniformed personnel. Exploiting duality theory, a distance function is used to model technology, retrieve information concerning substitutability and shadow prices of personnel, and test for cost minimization. Morishima elasticities are adopted to allow for asymmetry in substitution between types of personnel. It is found that the more adverse the public safety environment and budgetary condition, the more efficiently resources are allocated.

References (19)

  • S. Atkinson et al.

    The relative efficiency of public and private firms in a regulated environment: The case of U.S. electric utilities

    Journal of Public Economics

    (1986)
  • R. Fare et al.

    A distance function approach to measuring price efficiency

    Journal of Public Economics

    (1990)
  • R.G. Anderson et al.

    Confidence intervals for elasticity estimators in translog models

    Review of Economics and Statistics

    (1986)
  • C. Blackorby et al.

    The Morishima elasticity of substitution: Symmetry, consistency, separability, and its relationship to the Hicks and Allen elasticity

    Review of Economic Studies

    (1981)
  • C. Blackorby et al.

    Will the real elasticity please stand up?

    American Economic Review

    (1981)
  • C. Blackorby et al.

    Will the real elasticity please stand up? (A comparison of the Allen/Uzawa and Morishima elasticities)

  • M. Bradford et al.

    The rising cost of local public services: Some evidence and reflections

    National Tax Journal

    (1969)
  • M.N. Darrough et al.

    The Multi-output translog production cost function: The case of law enforcement agencies

  • B. Efron

    The jackknife, the bootstrap and other resampling plans

There are more references available in the full text version of this article.

Cited by (47)

  • Are water tariffs sufficient incentives to reduce water leakages? An empirical approach for Chile

    2019, Utilities Policy
    Citation Excerpt :

    To estimate the shadow price of water leakage considering the multi-output multi-input nature of the water distribution activity, we assume a translog technology and postulate an input distance function estimated using the SFA approach. This approach takes into accountrandom measurement errors in the data and the estimation of specific technology characteristics, such as returns to scale elasticities, input substitutability, cost complementarities and shadow prices (e.g., Färe et al., 1993; Grosskopf et al., 1995; Morrison Paul and Nehring, 2005). Over the last 30 years, the Chilean water industry carried out significant legal and institutional reforms to improve drinking water service and became a success example in Latin-America from the coverage and service quality perspective (Molinos-Senante, 2018).

View all citing articles on Scopus
View full text