Date of Award

1-13-2008

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Economics

First Advisor

Dr. Laura O. Taylor - Chair

Second Advisor

Dr. Jonathan C. Rork

Third Advisor

Dr. Paul J. Ferraro

Fourth Advisor

Dr. David L. Sjoquist

Fifth Advisor

Dr. Jason F. Shogren

Abstract

This dissertation investigates whether higher levels of “governmental fragmentation” in metropolitan statistical areas (MSA) leads to worse environmental outcomes. Fragmentation refers to the number of local governments in a given region or MSA as defined by the census. This research contributes to two bodies of literature, that of environmental federalism and that of urban growth and local government form. In the area of environmental federalism this dissertation extends the collective action model to include local governments. An empirical framework is developed that includes cross-sectional and panel data. In the urban growth and local government form literature, this dissertation comprehensively tests many existing measures of local government fragmentation within an environmental policy framework. It also modifies and extends some of the fragmentation variables. The results suggest that local government fragmentation does hinder MSAs from attaining the ozone standard. This dissertation extends the literature by examining the effect that local government fragmentation has on regional environmental quality. Six local government structure variables, jurisdiction count, special district dominance, central city dominance, county primacy, central city growth, and metropolitan power diffusion index are comprehensively tested to determine which might affect regional environmental quality. In addition, this research extends the use of the computationally complex measure of metropolitan power diffusion index to include additional local government expenditures as well as additional years of panel data. Two empirical estimation strategies were implemented, a cross-sectional approach and a panel data approach. The cross-sectional approach estimates the effects that long-term changes in local government structure have on attaining the ozone standard by measuring differences across MSAs. The panel data model’s primary purpose was that of a robustness check on the cross-sectional results. Three of the six tested fragmentation variables were found to have statistically significant effects on MSA attainment of the ozone standard in the cross-sectional model. Higher levels of metropolitan power diffusion index and jurisdiction count were found to hinder attainment of the ozone standard, while greater values of central city growth aided in reaching the attainment standard. Generally, the panel data results’ supported the results from the cross-sectional models. In addition, the panel model resolved some important estimation issues. Metropolitan power diffusion index was found to be correlated with unobservables in the random effects model, indicating that the cross-sectional results for metropolitan power diffusion index may be biased as well. This was not an issue for the variable jurisdiction count. Metropolitan power diffusion index and jurisdiction count are highly correlated with each other and this relationship was used to estimate a reasonable range for the effect metropolitan power diffusion index might have on the attainment of the ozone standard.

Included in

Economics Commons

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