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Income Distribution and the Optimal Provision of Local Public Goods


  • Aronsson, Thomas

    () (Department of Economics, Umeå University)

  • Wikström, Magnus

    () (Department of Economics, Umeå University)


This paper analyzes how the distribution of gross income among residents in a locality affects the local provision of public goods. The analysis is based on a two-type model, where the local residents can be either high income earners or low income earners. Local provision is assumed to reflect the actions of a benthamite planner giving equal weight to the utilities of all inhabitants. In this framework, three factors turn out to be particularly important for how the distribution of private income across local residents effects the local provision of public goods: (i) the local means of redistribution and taxation, (ii) the particular form of the local residents' utility functions and (iii) migration across localities.

Suggested Citation

  • Aronsson, Thomas & Wikström, Magnus, 1999. "Income Distribution and the Optimal Provision of Local Public Goods," Umeå Economic Studies 510, Umeå University, Department of Economics.
  • Handle: RePEc:hhs:umnees:0510

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    Income distribution; Local public goods;

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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