Abstract
This article aims at drawing the measurement index for urban infrastructure production cost disparity. Due to the difference in local public financial resource, a disparity will eventually occur and determine the actual provision level of urban infrastructure. Other than the above, various social and economic factors, such as average land prices (ALP) in each city, financial dependency ratio (FDR), population density (PD), discharge facilities for environmental pollution (EPF), distribution ratio on sewage system (DRSEW), and road pavement ratio (RDPVR), will affect the urban infrastructure provision. In this article, we first build a theoretical framework by reviewing the existing studies regarding the presumption on production cost disparity. Next, we establish the models of inducing type expenditure function, and through this, analyze the actual impact that the social and economic environmental variables have on the production cost. Using Korean data, the disparity index is estimated and interpreted.
Average land price which is calculated through 449,925 standard lots across nations, number of automobiles per road length within city, etc are used for empirical estimation. Major findings will be helpful in managing the budget in relation to intergovernmental grants and expenditures.