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Measuring The Benefits From Public Services: The Effects Of Local Government Spending On The Distribution Of Income In Norway

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  • Rolf Aaberge
  • Audun Langørgen

Abstract

The purpose of this paper is to provide an evaluation of how local public in‐kind benefits affect the distribution of income in Norway. To this end, a method that accounts for differences between municipalities in capacity to produce the same standard of public services is used for assessing the value of sector‐specific local public services in each municipality. Moreover, recipient frequencies in various demographic groups are used as basis for determining the allocation of the assessed value of services on citizens of the municipalities. The empirical results show that inequality in the (marginal) distribution of municipal in‐kind benefits is rather high. The contribution of municipal in‐kind benefits to inequality in the distribution of extended income (cash (after‐tax) income plus municipal in‐kind benefits) proves, however, to be approximately neutral.

Suggested Citation

  • Rolf Aaberge & Audun Langørgen, 2006. "Measuring The Benefits From Public Services: The Effects Of Local Government Spending On The Distribution Of Income In Norway," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(1), pages 61-83, March.
    • Handle: RePEc:bla:revinw:v:52:y:2006:i:1:p:61-83
    DOI: 10.1111/j.1475-4991.2006.00176.x
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    References listed on IDEAS

    as
    1. Timothy Smeeding & Gunther Schmaus & Brigitte Buhmann & Lee Rainwater, 1988. "Equivalence Scales, Well-Being, Inequality and Poverty: Sensitivity Estimates Across Ten Countries Using the LIS Database," LIS Working papers 17, LIS Cross-National Data Center in Luxembourg.
    2. Ruggeri, G C & Van Wart, D & Howard, R, 1994. "The Redistributional Impact of Government Spending in Canada," Public Finance = Finances publiques, , vol. 49(2), pages 212-243.
    3. repec:bla:revinw:v:44:y:1998:i:4:p:565-69 is not listed on IDEAS
    4. Brigitte Buhmann & Lee Rainwater & Guenther Schmaus & Timothy M. Smeeding, 1988. "Equivalence Scales, Well‐Being, Inequality, And Poverty: Sensitivity Estimates Across Ten Countries Using The Luxembourg Income Study (Lis) Database," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 34(2), pages 115-142, June.
    5. repec:bla:econom:v:52:y:1985:i:27:p:335-44 is not listed on IDEAS
    6. Aaberge, Rolf & Langorgen, Audun, 2003. "Fiscal and Spending Behavior of Local Governments: Identification of Price Effects When Prices Are Not Observed," Public Choice, Springer, vol. 117(1-2), pages 125-161, October.
    7. Audun Langørgen & Rolf Aaberge, 1999. "A Structural Approach for Measuring Fiscal Disparities," Discussion Papers 254, Statistics Norway, Research Department.
    8. Rolf Aaberge & Ingrid Melby, 1998. "The Sensitivity Of Income Inequality To Choice Of Equivalence Scales," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 44(4), pages 565-569, December.
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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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