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Fiscal and Spending Behavior of Local Governments: Identification of Price Effects When Prices Are Not Observed

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  • Aaberge, Rolf
  • Langorgen, Audun

Abstract

This paper analyzes local public fiscal and spending behavior in a setting where local governments, represented by the dominant party or coalition, are treated as utility maximizing agents. The econometric analysis, which is based on a modified version of ELES, recognizes total spending as well as total income as endogenous variables. Identification of the price effects is achieved by utilizing data on environmental cost factors and local tastes. The performance of the estimated model is investigated by testing its ability to make out-of-sample predictions of local government behavior. Copyright 2003 by Kluwer Academic Publishers

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Bibliographic Info

Article provided by Springer in its journal Public Choice.

Volume (Year): 117 (2003)
Issue (Month): 1-2 (October)
Pages: 125-61

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Handle: RePEc:kap:pubcho:v:117:y:2003:i:1-2:p:125-61

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Web page: http://www.springerlink.com/link.asp?id=100332

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Cited by:
  1. Witterblad, Mikael, 2008. "The Demand for Local Public Services in Sweden," UmeÃ¥ Economic Studies 730, Umeå University, Department of Economics.
  2. Haegeland, Torbjørn & Raaum, Oddbjørn & Salvanes, Kjell G., 2008. "Pennies from Heaven? Using Exogeneous Tax Variation to Identify Effects of School Resources on Pupil Achievements," IZA Discussion Papers 3561, Institute for the Study of Labor (IZA).
  3. Audun Langørgen & Dag Rønningen, 2004. "Local government preferences, individual needs, and the allocation of social assistance," Discussion Papers 380, Research Department of Statistics Norway.
  4. Witterblad, Mikael, 2008. "Essays on Redistribution and Local Public Expenditures," UmeÃ¥ Economic Studies 731, Umeå University, Department of Economics.
  5. Rolf Aaberge & Audun Langørgen, 2006. "Measuring The Benefits From Public Services: The Effects Of Local Government Spending On The Distribution Of Income In Norway," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(1), pages 61-83, 03.
  6. Aaberge, Rolf & Bhuller, Manudeep & Langørgen, Audun & Mogstad, Magne, 2010. "The Distributional Impact of Public Services When Needs Differ," IZA Discussion Papers 4826, Institute for the Study of Labor (IZA).
  7. Audun Langørgen, 2008. "Targeting Public Services through Unequal Treatment of Unequals," Discussion Papers 558, Research Department of Statistics Norway.
  8. Audun Langørgen, 2012. "A structural approach for analyzing fiscal equalization," Discussion Papers 715, Research Department of Statistics Norway.
  9. Audun Langørgen, 2011. "Targeting public services through the unequal treatment of unequals," International Tax and Public Finance, Springer, vol. 18(2), pages 193-213, April.
  10. Lars Håkonsen & Knut Løyland, 2013. "Local government allocation of cultural services," ACEI Working Paper Series AWP-06-2013, the Association for Cultural Economics International, revised Oct 2013.
  11. Bernardino Benito & Francisco Bastida & Cristina Vicente, 2013. "Municipal elections and cultural expenditure," Journal of Cultural Economics, Springer, vol. 37(1), pages 3-32, February.
  12. Marie-Estelle Binet, 2011. "Reconsidering the Demand for Municipal Public Goods Specification : Evidence from French Municipalities," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201120, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.

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