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The Revealed Preferences of a Government Bureaucracy: Empirical Evidence


  • Daniel McFadden


This paper develops a method for inferring, from the consequences or outcomes of organizational decisions, an implicit choice criterion such that the organization behaves as if it were following this decision rule. The method is quantified for the case of a public bureaucracy facing discrete alternatives, and is applied in a study of the decision rules underlying freeway route selection by the California Division of Highways. The author tests the form of benefit-cost calculus utilized by the bureaucracy, the implicit evaluation of the indirect benefits and costs, and the influence of political factors on routing decisions.

Suggested Citation

  • Daniel McFadden, 1976. "The Revealed Preferences of a Government Bureaucracy: Empirical Evidence," Bell Journal of Economics, The RAND Corporation, vol. 7(1), pages 55-72, Spring.
  • Handle: RePEc:rje:bellje:v:7:y:1976:i:spring:p:55-72

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    References listed on IDEAS

    1. Edwin Mansfield & John Rapoport & Anthony Romeo & Samuel Wagner & George Beardsley, 1977. "Social and Private Rates of Return from Industrial Innovations," The Quarterly Journal of Economics, Oxford University Press, vol. 91(2), pages 221-240.
    2. Mansfield, Edwin, 1980. "Basic Research and Productivity Increase in Manufacturing," American Economic Review, American Economic Association, vol. 70(5), pages 863-873, December.
    3. Berndt, Ernst R & Christensen, Laurits R, 1974. "Testing for the Existence of a Consistent Aggregate Index of Labor Inputs," American Economic Review, American Economic Association, vol. 64(3), pages 391-404, June.
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    Cited by:

    1. Dominique Prunetti & Alexandre Muzy & Eric Innocenti & Xavier Pieri, 2014. "Utility-based Multi-agent System with Spatial Interactions: The Case of Virtual Estate Development," Computational Economics, Springer;Society for Computational Economics, vol. 43(3), pages 271-299, March.
    2. repec:spr:lsprsc:v:10:y:2017:i:1:d:10.1007_s12076-016-0175-5 is not listed on IDEAS
    3. Mikołaj Czajkowski & Nick Hanley & Jacob LaRiviere, 2016. "Controlling for the Effects of Information in a Public Goods Discrete Choice Model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(3), pages 523-544, March.
    4. James J. Heckman & Jeffrey A. Smith & Christopher Taber, 1996. "What Do Bureaucrats Do? The Effects of Performance Standards and Bureaucratic Preferences on Acceptance into the JTPA Program," NBER Working Papers 5535, National Bureau of Economic Research, Inc.
    5. Kesternich, Iris & Heiss, Florian & McFadden, Daniel & Winter, Joachim, 2013. "Suit the action to the word, the word to the action: Hypothetical choices and real decisions in Medicare Part D," Journal of Health Economics, Elsevier, vol. 32(6), pages 1313-1324.
    6. Li, Shanjun & Kahn, Matthew E. & Nickelsburg, Jerry, 2015. "Public transit bus procurement: The role of energy prices, regulation and federal subsidies," Journal of Urban Economics, Elsevier, vol. 87(C), pages 57-71.
    7. Daniel L. McFadden, 1976. "Quantal Choice Analaysis: A Survey," NBER Chapters,in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 363-390 National Bureau of Economic Research, Inc.
    8. Czajkowski, Mikolaj & Hanley, Nicholas & LaRiviere, Jacob, 2012. "The Effects of Experience on Preference Uncertainty: Theory and Empirics for Public and Quasi-Public Goods," Stirling Economics Discussion Papers 2012-17, University of Stirling, Division of Economics.
    9. Czajkowski, Mikolaj & Hanley, Nicholas & LaRiviere, Jacob, 2013. "The Effects of Experience on Preference Uncertainty: Theory and Empirics for Public and Quasi-Public Environmental Goods," Stirling Economics Discussion Papers 2013-11, University of Stirling, Division of Economics.
    10. Mikolaj Czajkowski & Nick Hanley & Jacob LaRiviere, 2015. "The Effects of Experience on Preferences: Theory and Empirics for Environmental Public Goods," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(1), pages 333-351.
    11. Sandberg Hanssen, Thor-Erik & Jørgensen, Finn, 2015. "Transportation policy and road investments," Transport Policy, Elsevier, vol. 40(C), pages 49-57.
    12. Alfredo Esposto, 1998. "Takings, litigation, and just compensation," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 26(4), pages 397-412, December.
    13. Bergman, Mats A. & Jakobsson, Maria & Razo, Carlos, 2005. "An econometric analysis of the European Commission's merger decisions," International Journal of Industrial Organization, Elsevier, vol. 23(9-10), pages 717-737, December.
    14. Takalo, Tuomas & Tanayama, Tanja & Toivanen, Otto, 2008. "Evaluating innovation policy : a structural treatment effect model of R&D subsidies," Research Discussion Papers 7/2008, Bank of Finland.
    15. Jan Anne Annema, 2013. "The use of CBA in decision-making on mega-projects: empirical evidence," Chapters,in: International Handbook on Mega-Projects, chapter 13, pages 291-312 Edward Elgar Publishing.
    16. James S. Ang & Alan L. Tucker, 1988. "The Shareholder Wealth Effects Of Corporate Greenmail," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 11(4), pages 265-280, December.
    17. Hochman, Gal & Zilberman, David, 2016. "Corn Ethanol and US Biofuel Policy Ten Years Later: A Systematic Review and Meta-analysis," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235467, Agricultural and Applied Economics Association.
    18. Siqi Zheng & Matthew E. Kahn, 2013. "Understanding China's Urban Pollution Dynamics," Journal of Economic Literature, American Economic Association, vol. 51(3), pages 731-772, September.
    19. repec:sss:wpaper:201404 is not listed on IDEAS
    20. Salvador Bertomeu & Antonio Estache, 2016. "Unbundling Political and Economic Rationality: a Non-Parametric Approach Tested on Spain," Working Papers ECARES ECARES 2016-17, ULB -- Universite Libre de Bruxelles.
    21. S. Anderson & A. Glazer, 1984. "Public opinion and regulatory behavior," Public Choice, Springer, vol. 43(2), pages 187-194, January.
    22. Guilherme S. Bastos & Erik Lichtenberg, 2001. "Priorities in Cost Sharing for Soil and Water Conservation: A Revealed Preference Study," Land Economics, University of Wisconsin Press, vol. 77(4), pages 533-547.
    23. repec:sss:wpaper:201405 is not listed on IDEAS
    24. Richard Barke & William Riker, 1982. "A political theory of regulation with some observations on railway abandonments," Public Choice, Springer, vol. 39(1), pages 73-106, January.

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