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The Cost of Congestion for State and Local General Government Services in Australia

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  • Felix Chan
  • Jeffrey D. Petchey

Abstract

As the population increases, spending on publicly provided goods must also increase if there is congestion and governments want to maintain provision of the same level of benefit to everyone. This article estimates a parameter capturing this impact of congestion for the state and local component of the general government sector in Australia. It shows the congestion parameter is likely to be between 0.51 and 0.84 implying super congestion and/or decreasing returns to scale have dominated the supply of these goods. The per person cost of congestion has been rising and differs across states. Larger jurisdictions also have relatively higher per person congestion costs.

Suggested Citation

  • Felix Chan & Jeffrey D. Petchey, 2024. "The Cost of Congestion for State and Local General Government Services in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 57(3), pages 224-244, September.
    • Handle: RePEc:bla:ausecr:v:57:y:2024:i:3:p:224-244
    DOI: 10.1111/1467-8462.12543
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