What are Public Services Worth, and to Whom? Non-Parametric Estimation of Capitalization in Pune

42 Pages Posted: 26 Jul 2006

Date Written: May 19, 2006

Abstract

The availability and quality of basic public services are important determinants of urban quality of life. In many cities, rapid population growth and fiscal constraints are limiting the extent to which urban governments can keep up with increasing demand for these services. It therefore becomes important to prioritize provision of those services to best reflect local demand. The authors present a strategy to estimate the demand for public services, which is sensitive to heterogeneity in preferences across types of households, and the nonparametric estimation addresses problems arising from functional form restrictions. Using data from Pune, India, they estimate the demand for public services, as represented by the marginal change in the self-assessed monthly rental price of dwellings from the services. The authors find that the value of publicly provided services accruing to the poor is greater than that going to wealthier households, and even untargeted across-the-board investment in specific services can be progressive.

Keywords: Value of Public Services, Urban Household Surveys

JEL Classification: H40, R21

Suggested Citation

Lall, Somik V. and Lundberg, Mattias K.A., What are Public Services Worth, and to Whom? Non-Parametric Estimation of Capitalization in Pune (May 19, 2006). World Bank Policy Research Working Paper No. 3924, Available at SSRN: https://ssrn.com/abstract=920501

Somik V. Lall (Contact Author)

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/slall

Mattias K.A. Lundberg

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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