IDEAS home Printed from https://ideas.repec.org/a/mhr/finarc/urndoi10.1628-fa-2023-0006.html
   My bibliography  Save this article

Improving Public Good Supply and Income Equality: Facing a Potential Trade-Off

Author

Listed:
  • Wolfgang Buchholz
  • Dirk Rübbelke

Abstract

This paper explores for a standard public good economy how redistribution of income changes public good supply in a Lindahl equilibrium, which is a prototype of an efficient public good allocation. In particular, it is shown how under certain premises on preferences a less equal income distribution may lead to a higher public good supply in the non-cooperative Nash equilibrium than in a cooperative outcome as given by the Lindahl equilibrium. Then a trade-off between an increase of public good supply on the one hand and income equality on the other occurs. The degree of inequality that is needed for producing this result does not need to be too extreme but may be rather moderate, which is shown by an example with CES preferences.

Suggested Citation

  • Wolfgang Buchholz & Dirk Rübbelke, 2023. "Improving Public Good Supply and Income Equality: Facing a Potential Trade-Off," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 79(2), pages 146-163.
    • Handle: RePEc:mhr:finarc:urn:doi:10.1628/fa-2023-0006
    DOI: 10.1628/fa-2023-0006
    as

    Download full text from publisher

    File URL: https://www.mohrsiebeck.com/en/article/improving-public-good-supply-and-income-equality-facing-a-potential-trade-off-101628fa-2023-0006
    Download Restriction: Fulltext access is included for subscribers to the printed version.
    File URL: https://libkey.io/10.1628/fa-2023-0006?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.

    More about this item

    Keywords

    publicgoods; Nashequilibrium; Lindahlequilibrium; incomedistribution; environmentalpolicy;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    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:mhr:finarc:urn:doi:10.1628/fa-2023-0006. 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.

    We have no bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Thomas Wolpert (email available below). General contact details of provider: https://www.mohrsiebeck.com/fa .

    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.