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Rossa O'Keeffe – O'Donovan (Oxford) – "Water, Spillovers and Free Riding: Provision of Local Public Goods in a Spatial Network"
CREST Microeconomics Seminar :
Date: 19th June 2019
Place: Room 3001.
Rossa O’Keeffe – O’Donovan (Oxford) – “Water, Spillovers and Free Riding: Provision of Local Public Goods in a Spatial Network”
Abstract:When public goods are provided locally, investments may be made strategically in the presence of free riding and spillover effects between neighboring communities. I estimate the costs of fragmented provision of water pumps in rural Tanzania by structurally estimating a spatial network model of decentralized pump maintenance decisions. I identify strategic interactions by using exogenous variation in the similarity of pumps as a shifter in the strength of spillovers that are possible between them. Estimation of the model combines maximum simulated likelihood with a clustering algorithm that partitions the data into geographic clusters and allows for multiple equilibria. The results show that free riding and pump maintenance spillovers are important factors in explaining pump functionality. I estimate that standardization to a single pump technology to increase maintenance spillovers would increase pump functionality rates by 6 percentage points. Water collection fees discourage free riding and would increase pump functionality rates by 11 percentage points if adopted universally
Roxana Fernandez Machado (CREST), Marie Laure Allain (CREST), and Linda Schilling (CREST)
food provided, no registration needed