Satisfaction with local 'public goods' and services: The effects of household income and privatization in southern California

I consider several research questions in this dissertation, including whether household income and the privatization of municipal service provision matter when explaining homeowners' expressed satisfaction with local "public" services and homeowners' choice of local governance form. It will become clear that what are often thought of as traditional local public or municipal services can be supplied by private entities. Indeed that is a key part of this investigation. To simplify, I will not always refer to them as so-called public services (or municipal), but will continue to use conventional labels with the understanding that these goods and services can and often are privately supplied. I also address the question whether traditional local public governments and private homeowners' associations (HOAs) are complements or substitutes.;To properly treat these questions, I implemented a questionnaire survey of a sample of homeowners in the five counties of the Los Angeles metropolitan area of southern California. I conducted various empirical tests on the sample data, as well as on 2005 American Housing Survey National data.;Based on the empirical test results from my survey data, I find that in southern California, the interaction of income and privatization matters in terms of homeowners' reported satisfaction with their municipal services and hence the interaction affects their choice of local governance form. This is a test of the well known Tiebout model for southern California. Residents shop for the municipal services made available to them in the local metro area and compare many public and private alternatives. An important finding is that above-median-income homeowners (defined here as the homeowners whose household incomes are higher than the median household income in the Los Angeles area) find preferred options in both markets. Below-median-income homeowners are more likely to find preferred packages from private suppliers.;Also based on the empirical results from my survey data, I find that in southern California, it appears that public local governments and private HOAs are not substitutes, but complements. This follows from the finding that private suppliers in incorporated areas are preferred to private suppliers in unincorporated areas. A private HOA in an incorporated city is the most preferred local governance form, especially for below-median-income homeowners.;Empirical tests on the 2005 AHS National data showed that in the nation, privatization of neighborhoods improves affected homeowners' degree of satisfaction with their neighborhoods and street repair services, regardless of homeowners' household income level.