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Estimer la fonction de dépenses publiques locales avec et sans mesure du prix : les apports du système linéaire de dépenses

  • Marie-Estelle Binet

Following Borcherding and Deacon [1972] and Bergstrom and Goodman [1973], a sizeable empirical literature has used the median voter model to analyze local spending behaviors. The main innovation in this paper is methodological as the median voter ?s satisfaction is described by a Stone-Geary utility function. Then, we are able to specify the public spending function in a simplified linear expenditure system, which can be estimated without price measurement. Then, the median voter model offers a price variable which the voter uses to define her demand for local public goods. So, we are able to estimate the specification with a price measurement. We provide new evidence using French municipalities of more than 20,000 inhabitants. The main results suggest that the minimum public spending value is dominant but decreases with the population size. Estimates oblained with price measurement lead to an overestimation of the preferences parameter and to an underestimalion of the minimum part. Price and income elasticities are greater than values obtained with the traditional method.

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Article provided by Dalloz in its journal Revue d'économie politique.

Volume (Year): 121 (2011)
Issue (Month): 4 ()
Pages: 583-605

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Handle: RePEc:cai:repdal:redp_214_0583
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