Provides empirical evidence of the relationship between the structure of the local public goods market and the relative size of the local public sector. Market structure is measured with respect to both the degree of fragmentation and an index of concentration.

This paper uses new data on school district capital stocks, stochastic frontier analysis, and a value-added measure of school quality to provide the first direct evaluation of the relationship between school facilities and school district costs. We find that the cost of education increases as...