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Off-the-peak preferences over government size

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  • Francisco Martínez Mora
  • M. Socorro Puy

Abstract

We 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 effectiveness producing public good) induce voters’ preferences to be more intense towards underprovision.

Suggested Citation

  • Francisco Martínez Mora & M. Socorro Puy, 2010. "Off-the-peak preferences over government size," Working Papers 2010-05, FEDEA.
    • Handle: RePEc:fda:fdaddt:2010-05
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    More about this item

    JEL classification:

    • 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

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