IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Determinants of Expenditure Variation in Finnish Municipalities

  • Antti Moisio

This paper focuses on two separate issues. First, the expenditure response of Finnish municipalities to price and income changes during the matching grants period is examined. Second, the existence of the so-called "flypaper effect" under the formula-based grant period is tested. Two panel data sets are used: the last eight years (1985-1992) of the matching grants period and the first seven years (1993-1999) of the formula-based period. Seven expenditure categories are analysed. The results suggest that positive price elasticity parameters existed for education expenditures under the matching grants system. For the social welfare and health care sector, price elasticity was negative. One reason for positive price effects may have been the closed-ended grants in the education sector. For the formula-based grants period, the results lend support to the "flypaper effect" because the estimated grant parameters were larger than the income parameters for most of the expenditure categories studied.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.vatt.fi/file/vatt_publication_pdf/k269.pdf
Download Restriction: no

File URL: http://www.vatt.fi/publications/latestPublications/publication/Publication_1345_id/376
Download Restriction: no

Paper provided by Government Institute for Economic Research Finland (VATT) in its series Discussion Papers with number 269.

as
in new window

Length:
Date of creation: 19 Mar 2002
Date of revision:
Handle: RePEc:fer:dpaper:269
Contact details of provider: Postal: Arkadiankatu 7, P.O. Box 1279, FI-00101 Helsinki
Phone: +358 295 519 400
Fax: +358 295 519 599
Web page: http://www.vatt.fi/
Email:


More information through EDIRC

Order Information: Email:


References listed on IDEAS
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.:

as in new window
  1. Aronsson, Thomas & Wikstrom, Magnus, 1996. "Local public expenditure in Sweden a model where the median voter is not necessarily decisive," European Economic Review, Elsevier, vol. 40(9), pages 1705-1716, December.
  2. Olmsted, George M. & Denzau, Arthur T. & Roberts, Judith A., 1993. "We voted for this? : Institutions and educational spending," Journal of Public Economics, Elsevier, vol. 52(3), pages 363-376, October.
  3. Edward M. Gramlich & Harvy Galper, 1973. "State and Local Fiscal Behavior and Federal Grant Policy," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 4(1), pages 15-66.
  4. P.J. Grossman, 1988. "The Impact of Federal and State Grants on Local Government Spending: A test of the fiscal illusion hypothesis," Economics Discussion / Working Papers 88-07, The University of Western Australia, Department of Economics.
  5. Case, Anne C. & Rosen, Harvey S. & Hines, James Jr., 1993. "Budget spillovers and fiscal policy interdependence : Evidence from the states," Journal of Public Economics, Elsevier, vol. 52(3), pages 285-307, October.
  6. Holtz-Eakin, Douglas, 1992. " Elections and Aggregation: Interpreting Econometric Analyses of Local Governments," Public Choice, Springer, vol. 74(1), pages 17-42, July.
  7. Hamilton, Bruce W., 1983. "The flypaper effect and other anomalies," Journal of Public Economics, Elsevier, vol. 22(3), pages 347-361, December.
  8. Romer, Thomas & Rosenthal, Howard, 1979. "The elusive median voter," Journal of Public Economics, Elsevier, vol. 12(2), pages 143-170, October.
  9. James R. Hines & Richard H. Thaler, 1995. "The Flypaper Effect," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 217-226, Fall.
  10. Bergstrom, Theodore C & Goodman, Robert P, 1973. "Private Demands for Public Goods," American Economic Review, American Economic Association, vol. 63(3), pages 280-96, June.
  11. Becker, Elizabeth, 1996. " The Illusion of Fiscal Illusion: Unsticking the Flypaper Effect," Public Choice, Springer, vol. 86(1-2), pages 85-102, January.
  12. Gamkhar, Shama & Oates, Wallace E., 1996. "Asymmetries in the Response to Increases and Decreases in Intergovernmental Grants: Some Empirical Findings," National Tax Journal, National Tax Association, vol. 49(4), pages 501-12, December.
  13. Strumpf, Koleman S., 1998. "A predictive index for the flypaper effect," Journal of Public Economics, Elsevier, vol. 69(3), pages 389-412, September.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:fer:dpaper:269. 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: (Anita Niskanen)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.