IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v116y2012i3p343-345.html
   My bibliography  Save this article

On strong independence of allocative efficiency from distribution in the theory of public goods

Author

Listed:
  • Kleinberg, Norman L.
  • Ma, Barry K.
  • Weiss, Jeffrey H.

Abstract

We extend Bergstrom and Cornes (1983) to show that for strong independence of efficient allocations from distribution in a public goods economy, the utility functions of all consumers must identically be of the form: A(Y)Xi, where Y and Xi are respectively the quantities of public good and private good for consumer i, and A(⋅) is some arbitrary function. This implies that for an economy with heterogeneous consumer preferences, it is impossible to ensure that any redistribution of private goods will remain efficient, especially for boundary Pareto optima.

Suggested Citation

  • Kleinberg, Norman L. & Ma, Barry K. & Weiss, Jeffrey H., 2012. "On strong independence of allocative efficiency from distribution in the theory of public goods," Economics Letters, Elsevier, vol. 116(3), pages 343-345.
    • Handle: RePEc:eee:ecolet:v:116:y:2012:i:3:p:343-345
    DOI: 10.1016/j.econlet.2012.04.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176512001346
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2012.04.004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Stoker, Thomas M, 1984. "Completeness, Distribution Restrictions, and the Form of Aggregate Functions," Econometrica, Econometric Society, vol. 52(4), pages 887-907, July.
    2. Arthur Lewbel, 1989. "Exact Aggregation and a Representative Consumer," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 104(3), pages 621-633.
    3. Bergstrom, Theodore C & Cornes, Richard C, 1983. "Independence of Allocative Efficiency from Distribution in the Theory of Public Goods," Econometrica, Econometric Society, vol. 51(6), pages 1753-1765, November.
    4. Muellbauer, John, 1976. "Community Preferences and the Representative Consumer," Econometrica, Econometric Society, vol. 44(5), pages 979-999, September.
    5. Lau, Lawrence J., 1982. "A note on the fundamental theorem of exact aggregation," Economics Letters, Elsevier, vol. 9(2), pages 119-126.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kleinberg Norman L. & Ma Barry & Weiss Jeffrey, 2012. "On a Notion of Similarity with Endowments in Public Economics," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 12(1), pages 1-12, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Laisney, François, 1991. "Mikroökonometrische Untersuchung von Aggregationsproblemen: Eine partielle Übersicht," ZEW Discussion Papers 91-03, ZEW - Leibniz Centre for European Economic Research.
    2. Simon Alder & Timo Boppart & Andreas Müller, 2022. "A Theory of Structural Change That Can Fit the Data," American Economic Journal: Macroeconomics, American Economic Association, vol. 14(2), pages 160-206, April.
    3. Zizhuo Wang & Chaolin Yang & Hongsong Yuan & Yaowu Zhang, 2021. "Aggregation Bias in Estimating Log‐Log Demand Function," Production and Operations Management, Production and Operations Management Society, vol. 30(11), pages 3906-3922, November.
    4. Colby, Scott & Tim, Graciano & Jeffrey, LaFrance & Rulon, Pope, 2011. "Money illusion, Gorman and Lau," MPRA Paper 32709, University Library of Munich, Germany.
    5. Lau, Lawrence J. & Wu, Ho-Mou, 1996. "Exact aggregation under summability and homogeneity with individually variable prices," Economics Letters, Elsevier, vol. 50(3), pages 329-335, March.
    6. Ray, Ranjan, 1985. "Specification and time series estimation of dynamic Gorman Polar Form demand systems," European Economic Review, Elsevier, vol. 27(3), pages 357-374.
    7. Chambers, Robert G. & Pope, Rulon D., 1995. "Inequality Measures and Intergrable Demand Systems," Working Papers 197829, University of Maryland, Department of Agricultural and Resource Economics.
    8. Kesavan, Thulasiram, 1988. "Monte Carlo experiments of market demand theory," ISU General Staff Papers 198801010800009854, Iowa State University, Department of Economics.
    9. Alan P. Kirman, 1992. "Whom or What Does the Representative Individual Represent?," Journal of Economic Perspectives, American Economic Association, vol. 6(2), pages 117-136, Spring.
    10. van Garderen, Kees Jan & Lee, Kevin & Pesaran, M. Hashem, 2000. "Cross-sectional aggregation of non-linear models," Journal of Econometrics, Elsevier, vol. 95(2), pages 285-331, April.
    11. Chambers, Robert G. & Pope, Rulon D., 1996. "Aggregable price-taking firms," European Economic Review, Elsevier, vol. 40(2), pages 417-428, February.
    12. Maria D. Tito, 2015. "Welfare Evaluation in a Heterogeneous Agent Model: How Representative is the CES Representative Consumer?," Finance and Economics Discussion Series 2015-109, Board of Governors of the Federal Reserve System (U.S.).
    13. Cranfield, J. A. L. & Preckel, Paul V. & Eales, James S. & Hertel, Thomas W., 2004. "Simultaneous estimation of an implicit directly additive demand system and the distribution of expenditure--an application of maximum entropy," Economic Modelling, Elsevier, vol. 21(2), pages 361-385, March.
    14. Daniel G. Swaine, 2001. "Are taste and technology parameters stable? a test of \"deep\" parameter stability in real business cycle models of the U.S. economy," Working Papers 01-05, Federal Reserve Bank of Boston.
    15. Thomas F. Crossley & Hamish W. Low, 2011. "Is The Elasticity Of Intertemporal Substitution Constant?," Journal of the European Economic Association, European Economic Association, vol. 9(1), pages 87-105, February.
    16. Barnett, William A. & Serletis, Apostolos, 2008. "Consumer preferences and demand systems," Journal of Econometrics, Elsevier, vol. 147(2), pages 210-224, December.
    17. Elisabeth Gugl & Linda Welling, 2007. "The Early Bird gets the Worm? Birth Order Effects in a Dynamic Model of the Family," Department Discussion Papers 0710, Department of Economics, University of Victoria.
    18. Herrendorf, Berthold & Rogerson, Richard & Valentinyi, Ákos, 2014. "Growth and Structural Transformation," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 6, pages 855-941, Elsevier.
    19. Creedy, John & Guest, Ross, 2008. "Population ageing and intertemporal consumption: Representative agent versus social planner," Economic Modelling, Elsevier, vol. 25(3), pages 485-498, May.
    20. Simone Landini & Mauro Gallegati, 2014. "Heterogeneity, interaction and emergence: effects of composition," International Journal of Computational Economics and Econometrics, Inderscience Enterprises Ltd, vol. 4(3/4), pages 339-361.

    More about this item

    Keywords

    Public goods; Independence; Efficiency; Income distribution;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D30 - Microeconomics - - Distribution - - - General
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • H41 - Public Economics - - Publicly Provided Goods - - - 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:eee:ecolet:v:116:y:2012:i:3:p:343-345. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.