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Inefficient households and the mix of government spending

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  • Dan Anderberg

Abstract

A model is presented in which individuals can vote over government subsidies to a private good and over redistributive taxation. The subsidized good is purchased and shared by couples who act noncooperatively, while possibly being altruistic towards each other. The framework allows a separation of the subsidy policy from redistributive policy. In a majority voting equilibrium the subsidy is used exclusively to correct the individuals' spending pattern. The results suggest that spending on private goods should be an important item in government expenditures when there is strong positive income bias in the political process and/or when household decisions are relatively inefficient. Copyright Springer Science+Business Media, LLC 2007

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Bibliographic Info

Article provided by Springer in its journal Public Choice.

Volume (Year): 131 (2007)
Issue (Month): 1 (April)
Pages: 127-140

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Handle: RePEc:kap:pubcho:v:131:y:2007:i:1:p:127-140

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

Related research

Keywords: Family behavior{; Public Policy; Government expenditure mix;

References

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Citations

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Cited by:
  1. Volker Meier & Helmut Rainer, 2014. "Pigou Meets Ramsey: Gender-Based Taxation with Non-Cooperative Couples," Ifo Working Paper Series Ifo Working Paper No. 179, Ifo Institute for Economic Research at the University of Munich.
  2. CORNES, Richard & ITAYA, Jun-ichi & TANAKA, Aiko, 2007. "Private Provision of Public Goods between Families," Discussion paper series. A 194, Graduate School of Economics and Business Administration, Hokkaido University.
  3. Meier, Volker & Rainer, Helmut, 2012. "On the optimality of joint taxation for noncooperative couples," Munich Reprints in Economics 19177, University of Munich, Department of Economics.
  4. Meier, Volker & Rainer, Helmut, 2013. "Beyond Ramsey: Gender-Based Taxation with Non-Cooperative Couples," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79877, Verein für Socialpolitik / German Economic Association.
  5. Dan Anderberg & Helmut Rainer, 2011. "Domestic Abuse: Instrumental Violence and Economics Incentives," CESifo Working Paper Series 3673, CESifo Group Munich.

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