Doctoral Dissertations

Date of Award

6-1976

Degree Type

Dissertation

Degree Name

Doctor of Philosophy

Major

Agricultural Economics

Major Professor

M. B. Badenhop

Committee Members

Brady J. Deaton, David W. Brown, Keith E. Phillips

Abstract

Fire protection is a public service that plays a unique role protecting human life and property in a community. Recent studies indicate that fire protection is one of the key community characteristics in the plant location and expansion decisions made by industrial leaders, yet fire protection services are recognized to be severely inadequate in the rural areas of Tennessee. For these reasons, the specific public service to be analyzed in this study is fire protection. The problem faced by local government officials is to maintain and/or increase the quantity and quality of local public services in the face of a generally unfavorable financial situation. This issue, as it relates to the delivery of fire protection services, will be the focal point of the theoretical and policy considerations found in the study. The overall purpose of this study is to gain a fuller understanding of the economic costs of supplying fire protection services to the smaller communities and rural areas of Tennessee. The specific objectives are: 1) To examine topics of importance to the economic analysis of fire protection and to discuss the theoretical viewpoints relevant to the economic analysis of the cost and supply of a public service. 2) To specify and analyze models of the total and average cost of supplying fire protection services. a. To incorporate within the cost models a measure of quality and an imputed value for voluntary effort. b. To determine the existence and magnitude of economies or diseconomies of size associated with the cost of supplying fire protection services. 3) To delineate a supply function for fire protection services. An economic model of the cost of supplying fire protection services is presented that incorporates an imputed value for voluntary effort. The basic concern is with those variables that are hypothesized to be determinants of cost. A total cost model is specified with consideration given to the measurement of quantity and quality of output, and the definition of the environment in which this public service is delivered. The basic economic model of total cost and two modifications of the model were analyzed by using multiple regression techniques. Data requirements necessary for the analysis were fulfilled from a combination of primary and secondary data sources. Secondary data were supplemented by primary data obtained from a comprehensive survey of fire chiefs in Tennessee. Each estimation is discussed in terms of the explanatory power of the model and the level of significance, behavior, and magnitude of the results displayed by the variables considered. The major conclusions from the study are as follows: 1) The evaluation system for fire departments needs to incorporate within it indicators of individual quality performance such as actual response time, fire suppression effectiveness, and specialized rural equipment. 2) The total cost of supplying fire protection services is more dependent upon the quantity and quality of output supplied, the number of alarms related to fire protection, and the number of professional firemen than the physical environment in which the service is delivered. 3) The average cost function was hypothesized and shown to be L-shaped indicating the presence of economies of scale for the delivery of fire protection service beginning very gradually at a population protected level of 2,000. A stable low point nearly parallel to the quantity of output axis is reached beginning at a population protected level of around 12,000. 4) General revenue sharing is assumed to decrease the risk and uncertainty for local decision makers in terms of finances for public purposes and politics for selfish motives. By the use of specific economic assumptions and analytical techniques, it was shown that this influence of revenue sharing causes the supply function of a public service such as fire protection to be more responsive in terms of increasing the quantity and quality of the output supplied of the public service. The improvement of the level of public services in a community improves the quality of life for the citizens, but more importantly, this improvement may provide the needed emphasis for a sustained period of economic development. Employment providing industries are attracted to communities with good public services, and in particular, a high level of fire protection service.

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