ABSTRACT
In examining patterns of utilization of medical and paramedical services by the Australian elderly, Gibson (1983) made an interesting, counterintuitive discovery. This chapter focuses on developing a theoretical response to a puzzle that emerged in the course of analysing data collected for somewhat different purposes. Users of a social service incur three types of cost. First, there is the charge, if any, levied by the suppliers of the service. Second, there is the (financial) cost of travelling to the facility providing the service. Finally, there is the cost of the time involved: time spent travelling to the facility, time spent queueing upon arrival and time spent actually using the service. A priori, we would expect to find some tendency towards geographical dispersion in the service delivery points of a privately-provided service, whether or not it was publicly subsidized.
