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Demographic Characteristics and the Public Bundle

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  • Cutler, David M
  • Elmendorf, Douglas W
  • Zeckhauser, Richard J

Abstract

This paper explores the relationship between the demographic characteristics of a community and the quantities of goods and services provided by its government We consider three models of public spending: a traditional "selfish" public choice model in which individuals care only about themselves, a "community preference" model in which an individual's preferred spending depends on the characteristics of his or her community. and a sorting process through which individuals choose communities according to their tastes for public spending. To evaluate these models of spending, we examine how county and state spending in the United States is affected by the age and racial composition, and the total size of a jurisdiction. The estimated effects of demographic characteristics in the state equations are strikingly different from the estimated effects in the county equations, apparently because a jurisdiction's spending is affected differently by its own demographic characteristics and by the characteristics of the surrounding area.
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Suggested Citation

  • Cutler, David M & Elmendorf, Douglas W & Zeckhauser, Richard J, 1993. "Demographic Characteristics and the Public Bundle," Public Finance = Finances publiques, , vol. 48(Supplemen), pages 178-198.
    • Handle: RePEc:pfi:pubfin:v:48:y:1993:i:supplement:p:178-98
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    References listed on IDEAS

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    1. Schwartz, Amy Ellen, 1993. "Individual production, community characteristics and the provision of local public services," Journal of Public Economics, Elsevier, vol. 50(2), pages 277-289, February.
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    More about this item

    JEL classification:

    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence

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