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

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Author Info
Aaberge, Rolf
Langorgen, Audun

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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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File URL: http://journals.kluweronline.com/issn/0048-5829/contents
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Publisher 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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  1. Rolf Aaberge and Audun Langørgen, 2003. "Measuring the Benefits from Public Services The Effects of Local Government Spending on the Distribution of Income in Norway," Discussion Papers 339, Research Department of Statistics Norway. [Downloadable!]
    Other versions:
  2. Witterblad, Mikael, 2008. "Essays on Redistribution and Local Public Expenditures," UmeÃ¥ Economic Studies 731, Umeå University, Department of Economics. [Downloadable!]
  3. Audun Langørgen, 2008. "Targeting Public Services through Unequal Treatment of Unequals," Discussion Papers 558, Research Department of Statistics Norway. [Downloadable!]
  4. Witterblad, Mikael, 2008. "The Demand for Local Public Services in Sweden," UmeÃ¥ Economic Studies 730, Umeå University, Department of Economics. [Downloadable!]
  5. Torbjørn Hægeland, Oddbjørn Raaum and Kjell G. Salvanes, 2007. "Pennies from heaven. Using exogenous tax variation to identify effects of school resources on pupil achievement," Discussion Papers 508, Research Department of Statistics Norway. [Downloadable!]
    Other versions:
  6. Audun Langørgen and Dag Rønningen, 2004. "Local government preferences, individual needs, and the allocation of social assistance," Discussion Papers 380, Research Department of Statistics Norway. [Downloadable!]
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