Optimal Public Goods Provision: Implications of Endogenizing the Labor/Leisure Choice
Conventional analysis of public goods provision aggregates individual willingness to pay while treating income as exogenous, ignoring the fact that we generate income to allow us to purchase utility-generating goods. We explore the implications of endogenizing the labor/leisure decision by explicitly considering leisure demand in a model of public goods provision. We consider benefit analysis of public goods provision and find that increments of the public good will generally be under-valued using conventional analysis while decrements to the public good (rare in public good settings) will be overvalued.
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.:
- J. R. Hicks, 1943. "The Four Consumer's Surpluses," Review of Economic Studies, Oxford University Press, vol. 11(1), pages 31-41.
- Daniel McFadden, 1994. "Contingent Valuation and Social Choice," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(4), pages 689-708.
When requesting a correction, please mention this item's handle: RePEc:uwp:landec:v:84:y:2008:i:4:p:701-707. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.