Reconsidering the Demand for Municipal Public Goods Specification : Evidence from French Municipalities
AbstractFollowing Bergtrom and Goodman (1973), this paper can be integrated in the set of studies that have estimated the demand for municipal public services. The main innovation in this paper is methodological as we use a Stone Geary utility function to describe the median voter preferences. Unlike previous studies, we are able to derive the local public expenditure function in a (simplified) linear expenditure system, directly from the theoretical framework. The linear expenditure system provides an estimate of the portion of the incompressible public expenditure in each municipality. Using cross sectional municipal data from France, it is found to be 30% of the total per capita expenditure. Compared to the specification generally used in the literature, linear expenditure system shows a greater sensitivity to price and income variations and reveal a greater number of significant variables.
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Bibliographic InfoPaper provided by Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS in its series Economics Working Paper Archive (University of Rennes 1 & University of Caen) with number 201120.
Date of creation: Oct 2011
Date of revision:
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Postal: CREM (UMR CNRS 6211) - Faculty of Economics, 7 place Hoche, 35065 Rennes Cedex - France
Find related papers by JEL classification:
- H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
- R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-10-15 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Aaberge, Rolf & Langorgen, Audun, 2003. " Fiscal and Spending Behavior of Local Governments: Identification of Price Effects When Prices Are Not Observed," Public Choice, Springer, vol. 117(1-2), pages 125-61, October.
- Borcherding, Thomas E & Deacon, Robert T, 1972. "The Demand for the Services of Non-Federal Governments," American Economic Review, American Economic Association, vol. 62(5), pages 891-901, December.
- Maarten A. Allers & J. Paul Elhorst, 2011. "A Simultaneous Equations Model Of Fiscal Policy Interactions," Journal of Regional Science, Wiley Blackwell, vol. 51(2), pages 271-291, 05.
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