While public goods can provide an overall increase in welfare, 'inferior' p
ublic facilities produce externalities specifically impacting host location
s. Heterogeneous jurisdictional attributes, however, can cause net social b
enefits to vary across potential host communities. Using data from a unique
public works project, this paper empirically investigates whether policyma
kers consider heterogeneous conditions when locating prison facilities. Res
ults indicate that policymakers follow a process that maximizes net social
benefits by systematically delegating such facilities to tagging communitie
s; thereby potentially using the public facilities for economic development
. Additionally, results suggest that policymakers property consider existin
g infrastructure and agglomeration economies in the siting mechanism.