Objective: To identify the factors affecting the demand for local public health services and to compare the spending patterns of independent and unified public health departments.
Data Sources/Study Setting: Cross-sectional data for 2004 from various public health departments in Connecticut.
Study Design: Uses probit analysis to examine the factors affecting the consolidation of public health departments. These results help correct for sample selection bias in the estimation of the demand for local public health services using multiple regression analysis. A simulation technique determines how much each independent public health department would be expected to spend upon joining a unified public health district.
Data Collection: Data obtained from various government sources in Connecticut. Ninety-two of the municipalities participated in 18 different unified public health districts whereas 77 municipalities operated independent health departments.
Principal Findings: Wealthier municipalities are less likely to consolidate health departments. Population and income differences among municipalities inhibit consolidation. The tax-share elasticity of the demand for local public health is approximately −1.28 and the income elasticity equals 0.27. Little difference in spending is found between unified and independent public health departments.
Conclusions: Given that differences among communities inhibit the formation of public health districts, higher levels of government may have to offer financial inducements for communities to voluntarily join a district. The relatively large tax-share elasticity means that matching intergovernmental grants have the potential of stimulating the demand for local public health. An independent public health department is unlikely to experience a sharp spike in taxes upon joining a public health district.
From the *Department of Economics, Bryant University, Smithfield, Rhode Island; and †Center for Healthcare & Insurance Studies, University of Connecticut, Storrs, Connecticut.
Reprints: Rexford E. Santerre, PhD, University of Connecticut, Storrs, Connecticut 06269. E-mail: email@example.com.