IDEAS home Printed from https://ideas.repec.org/p/wrk/warwec/406.html
   My bibliography  Save this paper

Do Government Subsidies Increase the Private Supply of Public Goods?

Author

Listed:
  • Andreoni, J.
  • Bergstrom, T.

Abstract

We study three different models in which public goods are supplied by private contributions. In one of these models, tax-financed government subsidies to private contributions will definitely increase the equilibrium supply of public goods. In the other two models, government subsidies are neutralized by offsetting changes in private contributions. We explain why it is that these models lead to opposite conclusions and we argue on the basis of our first model that a government that wants to use taxes and subsidies to increase total provision of public goods will be able to do so. Indeed, our model yields a surprisingly decisive comparative statics result. If public goods and private goods are both normal goods, then an increase in the subsidy rate will necessarily increase the equilibrium supply of public goods. Copyright 1996 by Kluwer Academic Publishers
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Andreoni, J. & Bergstrom, T., 1993. "Do Government Subsidies Increase the Private Supply of Public Goods?," The Warwick Economics Research Paper Series (TWERPS) 406, University of Warwick, Department of Economics.
  • Handle: RePEc:wrk:warwec:406
    as

    Download full text from publisher

    File URL: https://www2.warwick.ac.uk/fac/soc/economics/research/workingpapers/1989-1994/twerp406.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Apps, Patricia & Savage, Elizabeth, 1989. "Labour supply, welfare rankings and the measurement of inequality," Journal of Public Economics, Elsevier, vol. 39(3), pages 335-364, August.
    2. Killingsworth, Mark R. & Heckman, James J., 1987. "Female labor supply: A survey," Handbook of Labor Economics,in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 2, pages 103-204 Elsevier.
    3. Manser, Marilyn & Brown, Murray, 1980. "Marriage and Household Decision-Making: A Bargaining Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 31-44, February.
    4. Apps, Patricia F. & Rees, Ray, 1988. "Taxation and the household," Journal of Public Economics, Elsevier, vol. 35(3), pages 355-369, April.
    5. Rees, Ray, 1988. "Taxation and the Household," Munich Reprints in Economics 3411, University of Munich, Department of Economics.
    6. Pollak, Robert A & Wales, Terence J, 1979. "Welfare Comparisons and Equivalence Scales," American Economic Review, American Economic Association, vol. 69(2), pages 216-221, May.
    7. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
    8. Mroz, Thomas A, 1987. "The Sensitivity of an Empirical Model of Married Women's Hours of Work to Economic and Statistical Assumptions," Econometrica, Econometric Society, vol. 55(4), pages 765-799, July.
    9. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-467, June.
    10. Patricia Apps & Glenn Jones, 1986. "Selective taxation of couples," Journal of Economics, Springer, vol. 5(1), pages 1-15, December.
    11. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
    12. Mark R. Killingsworth, 1987. "Heterogeneous Preferences, Compensating Wage Differentials, and Comparable Worth," The Quarterly Journal of Economics, Oxford University Press, vol. 102(4), pages 727-742.
    13. McElroy, Marjorie B & Horney, Mary Jean, 1981. "Nash-Bargained Household Decisions: Toward a Generalization of the Theory of Demand," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(2), pages 333-349, June.
    14. Apps, Patricia, 1982. "Institutional inequality and tax incidence," Journal of Public Economics, Elsevier, vol. 18(2), pages 217-242, July.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    government ; supply ; public goods;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wrk:warwec:406. 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: (Margaret Nash). General contact details of provider: http://edirc.repec.org/data/dewaruk.html .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.