An economic theory of public facilities in space (Q1060120): Difference between revisions

The paper deals with the determination of the number and locations of facilities in which a public service is made available to consumers. The solutions obtained by planning and voting are characterized and compared. Planning is made by reference to a social welfare function, voting is based on the majority rule principle. Not surprisingly, the outcomes depend on the particular taxation scheme implemented. Two particular, but meaningful, schemes are considered. The first is a benefit taxation based on consumers locations. Under these circumstances, the Pareto-optimal configuration is (unanimously) supported by voting. The second scheme is an income taxation. Then the Pareto-optimal configuration is no longer supported by majority voting. Instead voting yields a configuration which turns out to be the Rawlsian configuration.