IDEAS home Printed from https://ideas.repec.org/a/kap/pubcho/v52y1987i3p257-272.html
   My bibliography  Save this article

Budgetgames and the private and social demand for mixed public goods

Author

Listed:
  • Hans Groot
  • Evert Pommer

Abstract

We have indicated how budgetgames played by a representative sample of voters can be used to estimate the marginal social demand for mixed public goods. A model has been developed that enables us to distinguish between private and social demand considerations of the players. Information on marginal social demand is obtained by comparing the actual outcome of the game with a simulated game solution based on the optimization of private benefits only. This optimization problem is shown to be approximately equivalent to a linear programming problem in which each respondent minimizes the loss of subsidies on his consumption of the mixed public goods considered. Empirical results show the largest marginal social demand for public services for the elderly, followed by mental health care, primary and secondary education and higher education. A negative marginal social demand is expressed for in-patient health care, police and justice, outpatient health care and culture and recreation, the latter service having the smallest social demand. An unexpected result is the relatively large marginal social demand for higher education. Although this service is severly cut in the actual game, this outcome mainly derives from small private benefits to the average voter. Therefore, the usual interpretation of budgetgames — that identifies heavy budget cuts with small social demand — underestimates the social demand for higher education. The reverse is true for general in-patient health care. Although this service is moderately cut in the actual game, this result mainly derives from the large private benefits to the average voter. In this case the usual interpretation of the game overestimates social demand. We have also studied the dependence of the marginal social demand pattern on the political orientation of the voters. Apart from typical pure or almost pure public goods such as defence, general government and police and justice services — clearly favoured by right-wing voters — we find no strong dependence on political orientation. We think the presented approach is a step towards the measurement of social demand for mixed public goods using stated voter preferences in a well-defined budgetgame framework. Such a direct approach seems to be a useful complement to the indirect revealed preferences approach, which faces large theoretical and empirical problems due to the required complex models of collective decisionmaking. We also have shown the importance of the explicit incorporation of private benefit considerations in the interpretation of budgetgames. The latter are indispensable when correct conclusions on the social demand for mixed public goods are to be drawn from such games. Future research should include the study of possible biases introduced by different designs of budgetgames, as well as more refined procedures for the estimation of private and social demand for public goods from budgetgame solutions. Copyright Martinus Nijhoff Publishers 1987

Suggested Citation

  • Hans Groot & Evert Pommer, 1987. "Budgetgames and the private and social demand for mixed public goods," Public Choice, Springer, vol. 52(3), pages 257-272, January.
  • Handle: RePEc:kap:pubcho:v:52:y:1987:i:3:p:257-272
    DOI: 10.1007/BF00116709
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/BF00116709
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1007/BF00116709?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. Bergstrom, Theodore C & Rubinfeld, Daniel L & Shapiro, Perry, 1982. "Micro-Based Estimates of Demand Functions for Local School Expenditures," Econometrica, Econometric Society, vol. 50(5), pages 1183-1205, September.
    2. Gramlich, Edward M & Rubinfeld, Daniel L, 1982. "Micro Estimates of Public Spending Demand Functions and Tests of the Tiebout and Median-Voter Hypotheses," Journal of Political Economy, University of Chicago Press, vol. 90(3), pages 536-560, June.
    3. Wyckoff, James H., 1984. "The nonexcludable publicness of primary and secondary public education," Journal of Public Economics, Elsevier, vol. 24(3), pages 331-351, August.
    4. Bohm, Peter, 1984. "Revealing demand for an actual public good," Journal of Public Economics, Elsevier, vol. 24(2), pages 135-151, July.
    5. Peter Bohm, 1984. "Revealing demand for an actual public good," Framed Field Experiments 00129, The Field Experiments Website.
    6. Hockley, G. C. & Harbour, G., 1983. "Revealed preferences between public expenditures and taxation cuts: Public sector choice," Journal of Public Economics, Elsevier, vol. 22(3), pages 387-399, December.
    7. James Ferris, 1983. "Demands for public spending: An attitudinal approach," Public Choice, Springer, vol. 40(2), pages 135-154, January.
    8. Maital, Shlomo, 1979. "Measurement of Net Benefits from Public Goods: A New Approach Using Survey Data," Public Finance = Finances publiques, , vol. 34(1), pages 85-99.
    9. Milton Friedman & L. J. Savage, 1948. "The Utility Analysis of Choices Involving Risk," Journal of Political Economy, University of Chicago Press, vol. 56(4), pages 279-279.
    10. Thomas Romer & Howard Rosenthal, 1979. "Bureaucrats Versus Voters: On the Political Economy of Resource Allocation by Direct Democracy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 93(4), pages 563-587.
    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. François Facchini, 1993. "Paysage et économie : la mise en évidence d'une solution de marché," Économie rurale, Programme National Persée, vol. 218(1), pages 12-18.
    2. Kerr, Geoffrey N. & Cullen, Ross & Hughey, Kenneth F.D., 2005. "Stated Preference Evaluation of Government Budgets," 2005 Conference, August 26-27, 2005, Nelson, New Zealand 98520, New Zealand Agricultural and Resource Economics Society.
    3. Nissim Ben‐David & Tchai Tavor, 2011. "Measurement of the social loss of wrong public budget allocation," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 38(3), pages 209-217, February.
    4. Kemp, Simon & Willetts, Karyn, 1995. "The value of services supplied by the New Zealand government," Journal of Economic Psychology, Elsevier, vol. 16(1), pages 23-37, March.
    5. Hans Groot & Evert Pommer, 1989. "The stability of stated preferences for public goods: Evidence from recent budget games," Public Choice, Springer, vol. 60(2), pages 123-132, February.
    6. Kemp, Simon & Willetts, Karyn, 1995. "Rating the value of government-funded services: Comparison of methods," Journal of Economic Psychology, Elsevier, vol. 16(1), pages 1-21, March.

    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. Rockoff, Jonah E., 2010. "Local response to fiscal incentives in heterogeneous communities," Journal of Urban Economics, Elsevier, vol. 68(2), pages 138-147, September.
    2. Gross, John, 1995. "Heterogeneity of preferences for local public goods: The case of private expenditure on public education," Journal of Public Economics, Elsevier, vol. 57(1), pages 103-127, May.
    3. Pradhan, Menno & Ravallion, Martin, 2003. "Who wants safer streets? Explaining concern for public safety in Brazil," Journal of Economic Psychology, Elsevier, vol. 24(1), pages 17-33, February.
    4. Villani, Salvatore & D'alessio, Lidia & Pica, Federico, 2008. "La questione dei costi standard ed i problemi del Mezzogiorno [The issue of standard costs and problems of the Southern Italy]," MPRA Paper 30214, University Library of Munich, Germany, revised Aug 2008.
    5. Rhee, Se-Koo, 1996. "The impact of intergovernmental grants-in-aid on public school expenditure under the segregated school system," ISU General Staff Papers 1996010108000012396, Iowa State University, Department of Economics.
    6. Richard T. Carson & Nicholas E. Flores & Kerry M. Martin & Jennifer L. Wright, 1996. "Contingent Valuation and Revealed Preference Methodologies: Comparing the Estimates for Quasi-Public Goods," Land Economics, University of Wisconsin Press, vol. 72(1), pages 80-99.
    7. Rodney Fort, 1988. "The median voter, setters, and non-repeated construction bond issues," Public Choice, Springer, vol. 56(3), pages 213-231, March.
    8. Hans Groot & Evert Pommer, 1989. "The stability of stated preferences for public goods: Evidence from recent budget games," Public Choice, Springer, vol. 60(2), pages 123-132, February.
    9. Judy A. Temple & Susan Porter‐Hudak, 1995. "Preferences For State Tax And Spending Policies: Evidence From Survey Data On The Role Of Income," Economics and Politics, Wiley Blackwell, vol. 7(1), pages 43-58, March.
    10. Stina Hökby & Tore Söderqvist, 2003. "Elasticities of Demand and Willingness to Pay for Environmental Services in Sweden," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 26(3), pages 361-383, November.
    11. Jordan, Jeffrey L. & Elnagheeb, Abdelmoneim H., 1992. "The Structure Of Citizen Preferences For Government Soil Erosion Control Programs," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 24(2), pages 1-10, December.
    12. Jacques H. Dreze, 1995. "Forty Years of Public Economics: A Personal Perspective," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 111-130, Spring.
    13. Eric J. Brunner & Stephen L. Ross, 2009. "Is the Median Voter Decisive? Evidence of 'Ends Against the Middle' From Referenda Voting Patterns," Working papers 2009-02, University of Connecticut, Department of Economics, revised May 2010.
    14. Miles Finney, 1999. "Constituency Preference And Police Consolidation: The Case Of West Hollywood," Contemporary Economic Policy, Western Economic Association International, vol. 17(2), pages 235-242, April.
    15. Shogren, Jason F., 1993. "Experimental Markets and Environmental Policy," Agricultural and Resource Economics Review, Cambridge University Press, vol. 22(2), pages 117-129, October.
    16. J.D. Snowball & G.G. Antrobus, 2001. "Measuring The Value Of The Arts To Society: The Importance Of The Value Of Externalities For Lower Income And Education Groups In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 69(4), pages 752-766, December.
    17. Raúl Alberto Ponce Rodríguez & Benito Alan Ponce Rodríguez, 2021. "Regional Heterogeneity of Preferences and Intergovernmental Transfers," Economies, MDPI, vol. 9(1), pages 1-21, March.
    18. Theodore C. Bergstrom & Judith Roberts & Daniel L. Rubinfeld & Perry Shapiro, 1986. "The Efficiency of the Supply of Public Education," NBER Working Papers 1901, National Bureau of Economic Research, Inc.
    19. Harrison, Glenn W & Hirshleifer, Jack, 1989. "An Experimental Evaluation of Weakest Link/Best Shot Models of Public Goods," Journal of Political Economy, University of Chicago Press, vol. 97(1), pages 201-225, February.
    20. Abueg, Luisito, 2019. "A survey of the ocean’s plastic waste problem, and some policy developments of the Philippines," MPRA Paper 96263, University Library of Munich, Germany.

    More about this item

    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:kap:pubcho:v:52:y:1987:i:3:p:257-272. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.