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NESTED FISCAL IMPACT MEASURES USING THE NEW THEORY OF LOCAL PUBLIC GOODS*
Authors:Eric J. Heikkila  Steven G. Craig
Abstract:In this paper, we use recent advances in the theory of local public goods to develop more-complete measures of the fiscal impacts of population change. Each fiscal impact measure extends the average-cost-based simple multiplier. The service-based impact measure accounts for the public service production function. The local welfare measure further allows the size of the public budget to vary. The global welfare measure additionally introduces interneighborhood substitution of public services. These four nested measures are calculated for police servims in Vancouver. We demonstrate that the commonly used simple multiplier is an unreliable estimator of fiscal impacts.
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