Off-the-peak preferences over government size
AbstractWe show that preferences-bias towards overprovision or underprovision can explain the asymmetric location of electoral candidates with respect to the median voter. We analyze the determinants of preferences off-the-peak and find that: (i) The sign of the third derivative of the policy-induced utility function indicates whether preferences are bias towards overprovision (positive) or underprovision (negative). (ii) The analog of Kimball's coefficient of prudence can be used to measure the asymmetry of preferences. (iii) Consumers’risk aversion and government corruption (in the form of decreasing e¤ectiveness producing public good) induce voters’ preferences to be more intense towards underprovision.
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Bibliographic InfoPaper provided by FEDEA in its series Working Papers with number 2010-05.
Date of creation: Feb 2010
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Other versions of this item:
- Francisco Martínez-Mora & M. Socorro Puy, 2009. "Off-the-peak preferences over government size," Working Papers 2009-9, Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center.
- Francisco Martínez-Mora & M. Socorro Puy, 2010. "Off-the-peak preferences over government size," Discussion Papers in Economics 10/04, Department of Economics, University of Leicester.
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
- H5 - Public Economics - - National Government Expenditures and Related Policies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-03-20 (All new papers)
- NEP-CDM-2010-03-20 (Collective Decision-Making)
- NEP-PBE-2010-03-20 (Public Economics)
- NEP-POL-2010-03-20 (Positive Political Economics)
- NEP-PUB-2010-03-20 (Public Finance)
- NEP-UPT-2010-03-20 (Utility Models & Prospect Theory)
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