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Inefficient households and the mix of government spending

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  • Dan Anderberg

Abstract

A model is presented in which individuals can vote over government subsidies to a private good and over redistributive taxation. The subsidized good is purchased and shared by couples who act noncooperatively, while possibly being altruistic towards each other. The framework allows a separation of the subsidy policy from redistributive policy. In a majority voting equilibrium the subsidy is used exclusively to correct the individuals' spending pattern. The results suggest that spending on private goods should be an important item in government expenditures when there is strong positive income bias in the political process and/or when household decisions are relatively inefficient. Copyright Springer Science+Business Media, LLC 2007

Suggested Citation

  • Dan Anderberg, 2007. "Inefficient households and the mix of government spending," Public Choice, Springer, vol. 131(1), pages 127-140, April.
    • Handle: RePEc:kap:pubcho:v:131:y:2007:i:1:p:127-140
    DOI: 10.1007/s11127-006-9109-x
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    References listed on IDEAS

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    Cited by:

    1. Volker Meier & Helmut Rainer, 2012. "Beyond Ramsey: Gender-Based Taxation with Non-Cooperative Couples," CESifo Working Paper Series 3966, CESifo.
    2. Anderberg, Dan & Rainer, Helmut, 2013. "Economic abuse: A theory of intrahousehold sabotage," Journal of Public Economics, Elsevier, vol. 97(C), pages 282-295.
    3. Meier, Volker & Rainer, Helmut, 2015. "Pigou meets Ramsey: Gender-based taxation with non-cooperative couples," European Economic Review, Elsevier, vol. 77(C), pages 28-46.
    4. Meier, Volker & Rainer, Helmut, 2012. "On the optimality of joint taxation for noncooperative couples," Labour Economics, Elsevier, vol. 19(4), pages 633-641.
    5. Richard Cornes & Jun-ichi Itaya & Aiko Tanaka, 2012. "Private provision of public goods between families," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(4), pages 1451-1480, October.
    6. Dan Anderberg & Helmut Rainer, 2011. "Domestic Abuse: Instrumental Violence and Economics Incentives," CESifo Working Paper Series 3673, CESifo.
    7. Takuya Obara & Yoshitomo Ogawa, 2020. "Optimal Taxation in an Endogenous Fertility Model with Non-Cooperative Couples," Discussion Paper Series 211, School of Economics, Kwansei Gakuin University, revised Jan 2021.

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