Screening the impacts of municipal service policy changes

The planning of municipal service delivery systems requires accurate forecasts of demand, and particularly of the effects the quality of service delivery has on demand. A metholology for this problem should meet three criteria, if it is to be useful for municipal planning: it must be low-cost and use generally available data; it must be based on user behavior, so that the effects of policy changes can be correctly attributed; and it must allow testing of the transferability of the results, since this is required for general forecasting use. This paper develops such a methodology, based on econometric analysis of data from a number of service areas within a number of regions, forming a double cross-section. Empirical tests of the methodology were performed for two local government services where the effect of service quality on demand is important: sewer and highway construction, which have been hypothesized to affect the patterns of development within regions; and solid waste collection, where the level of service provided affects how much waste enters the collection system and how much is littered, burned or recycled. The two case studies and other analyses suggest that the methodology is a useful tool for testing whether policy changes have an effect on the demand for service, but not for accurate demand forecasting. Thus, these simple models are relevant for the role of screening the effect of policy changes, but more detailed and localized approaches are necessary for system design.