Local Public Finance: An Alternative Perspective
In the standard model of local public finance, a welfare-maximizing local authority with an income constraint ought to produce a set of services, user charges and taxes that are Pareto efficient, on the assumption that a higher level of government equalizes the marginal social utilities of everyone's income. In the alternative model of this paper, the higher-level government is assumed to equate marginal social utilities of time, not income, while the local authorities maximize welfare in the face of a time constraint. In this alternative model, unlike the standard model, optimal prices for some types of excludable goods yield consensus over facility size even in a heterogeneous population, and segregation hurts the worse off. Local actions have redistributive effects, while a senior level of government establishes, as usual, the framework for such redistribution.
|Date of creation:||15 Apr 1996|
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- Juster, F Thomas & Stafford, Frank P, 1991.
"The Allocation of Time: Empirical Findings, Behavioral Models, and Problems of Measurement,"
Journal of Economic Literature,
American Economic Association, vol. 29(2), pages 471-522, June.
- Juster, F. Thomas & Stafford, Frank P., 1990. "The Allocation of Time: Empirical Findings, Behavioural Models, and Problems of Measurement," Working Paper Series 258, Research Institute of Industrial Economics.
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- Bruce W. Hamilton, 1975. "Zoning and Property Taxation in a System of Local Governments," Urban Studies, Urban Studies Journal Limited, vol. 12(2), pages 205-211, June.
- Feldstein, Martin S, 1972. "Distributional Equity and the Optimal Structure of Public Prices," American Economic Review, American Economic Association, vol. 62(1), pages 32-36, March. Full references (including those not matched with items on IDEAS)
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