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Inefficient households and the mix of government spending

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Author Info
Dan Anderberg

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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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File URL: http://hdl.handle.net/10.1007/s11127-006-9109-x
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Publisher Info
Article provided by Springer in its journal Public Choice.

Volume (Year): 131 (2007)
Issue (Month): 1 (April)
Pages: 127-140
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
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

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

References listed on IDEAS
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  7. Roberts, Kevin W. S., 1977. "Voting over income tax schedules," Journal of Public Economics, Elsevier, vol. 8(3), pages 329-340, December. [Downloadable!] (restricted)
  8. Fernandez, Raquel & Rogerson, Richard, 1995. "On the Political Economy of Education Subsidies," Review of Economic Studies, Blackwell Publishing, vol. 62(2), pages 249-62, April. [Downloadable!] (restricted)
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  9. Konrad, Kai A & Lommerud, Kjell Erik, 1995. " Family Policy with Non-cooperative Families," Scandinavian Journal of Economics, Blackwell Publishing, vol. 97(4), pages 581-601, December.
  10. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-27, October. [Downloadable!] (restricted)
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  12. M. Browning & P. A. Chiappori, 1998. "Efficient Intra-Household Allocations: A General Characterization and Empirical Tests," Econometrica, Econometric Society, vol. 66(6), pages 1241-1278, November.
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  13. Epple, Dennis & Romano, Richard E., 1996. "Ends against the middle: Determining public service provision when there are private alternatives," Journal of Public Economics, Elsevier, vol. 62(3), pages 297-325, November. [Downloadable!] (restricted)
  14. Shelly Lundberg & Robert A. Pollak, 2001. "Efficiency in Marriage," NBER Working Papers 8642, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  15. Stigler, George J, 1970. "Director's Law of Public Income Redistribution," Journal of Law & Economics, University of Chicago Press, vol. 13(1), pages 1-10, April.
  16. Greene, Kenneth V & Nikolaev, Oleg, 1999. " Voter Participation and the Redistributive State," Public Choice, Springer, vol. 98(1-2), pages 213-26, January. [Downloadable!] (restricted)
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