Does Urban Sprawl Increase the Costs of Providing Local Public Services? Evidence from Spanish Municipalities

Abstract

This paper examines the impact of urban sprawl, a phenomenon of particular interest in Spain, which is currently experiencing this process of rapid, low-density urban expansion. Many adverse consequences are attributed to urban sprawl (such as traffic congestion, air pollution and social segregation), although this paper is concerned primarily with the rising costs of providing local public services. The initial aim is to develop an accurate measure of urban sprawl so that its impact on municipal budgets can be tested empirically. Then, an empirical analysis is undertaken using a cross-sectional dataset of 2500 Spanish municipalities for the year 2003 and a piece-wise linear function to account for the potentially non-linear relationship between sprawl and local costs. The estimations derived from the expenditure equations for both aggregate and six disaggregated spending categories indicate that low-density development patterns lead to greater provision costs of local public services.