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Salience And The Government Provision Of Public Goods

Author

Listed:
  • Matthew Wibbenmeyer
  • Sarah E. Anderson
  • Andrew J. Plantinga

Abstract

This paper examines how behavioral biases caused by salient events affect the government provision of public goods. We develop a theory in which competing communities lobby the government for allocations of a local public good. Salient events bias community demands for the good, which results in inefficient allocations. We empirically test this theory using salient wildfires and government projects to reduce wildfire risk. Wildfires reduce risk to nearby communities, but may increase demand for fuels management projects because of biases induced by salient wildfires. We find that communities experiencing recent nearby fires are more likely to receive fuels management projects. (JEL D03, H41, Q24)

Suggested Citation

  • Matthew Wibbenmeyer & Sarah E. Anderson & Andrew J. Plantinga, 2019. "Salience And The Government Provision Of Public Goods," Economic Inquiry, Western Economic Association International, vol. 57(3), pages 1547-1567, July.
    • Handle: RePEc:bla:ecinqu:v:57:y:2019:i:3:p:1547-1567
    DOI: 10.1111/ecin.12781
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    Cited by:

    1. Wibbenmeyer, Matthew & Anderson, Sarah & Plantinga, Andrew J., 2020. "Inequality in Agency Responsiveness: Evidence from Salient Wildfire Events," RFF Working Paper Series 20-22, Resources for the Future.
    2. Sarah E. Anderson & Terry L. Anderson & Alice C. Hill & Matthew E. Kahn & Howard Kunreuther & Gary D. Libecap & Hari Mantripragada & Pierre Mérel & Andrew J. Plantinga & V. Kerry Smith, 2019. "The Critical Role Of Markets In Climate Change Adaptation," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 10(01), pages 1-17, February.
    3. Jennifer Balch & Katherine Curtis & Jack DeWaard & Elizabeth Fussell & Kathryn McConnell & Kobie Price & Lise St. Denis & Stephan D. Whitaker, 2021. "Effects of Wildfire Destruction on Migration, Consumer Credit, and Financial Distress," Working Papers 21-29, Federal Reserve Bank of Cleveland.
    4. Sarah E. Anderson & Andrew J. Plantinga & Matthew Wibbenmeyer, 2022. "Unequal Treatments: Federal Wildfire Fuels Projects and Socioeconomic Status of Nearby Communities," NBER Chapters, in: Environmental and Energy Policy and the Economy, volume 4, pages 177-201, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land

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