IDEAS home Printed from https://ideas.repec.org/a/sae/pubfin/v15y1987i2p138-165.html
   My bibliography  Save this article

The Benefit Incidence of Consumption Public Goods

Author

Listed:
  • Daniel P. Hewitt

    (University of Connecticut, Georgetown University)

Abstract

This article offers a total benefits approach to measuring the incidence of government expenditures as an alternative to equating benefits to Lindahl taxes. The procedure begins by decomposing each government program into its categories of benefits (or characteristies), which include (1) transfer, (2) productivity enhancements, and (3) public consumption benefits. The next step is to assess the benefit incidence of each category individually. The main result of this article, whieh focuses on the last category, is that the incidence ofpure consumption public goods is inversely related to their income elasticity of demand. The result follows from the definition of benefits and because these goods definitionally enter the utility function in a separable manner. Empirical estimates of the income elasticity of several programs confirms the plausibility of the separability property and the existence of different incidence types among the public goods, and thereby disproves the contention that the Lindahl taxes are the universal benefit taxes.

Suggested Citation

  • Daniel P. Hewitt, 1987. "The Benefit Incidence of Consumption Public Goods," Public Finance Review, , vol. 15(2), pages 138-165, April.
    • Handle: RePEc:sae:pubfin:v:15:y:1987:i:2:p:138-165
    DOI: 10.1177/109114218701500202
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/109114218701500202
    Download Restriction: no
    File URL: https://libkey.io/10.1177/109114218701500202?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
    ---><---

    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. De Wulf, Luc, 1981. "Incidence of Budgetary Outlays: Where Do We Go from Here?," Public Finance = Finances publiques, , vol. 36(1), pages 55-76.
    3. Kolm, Serge-Christophe, 1976. "Unequal inequalities. I," Journal of Economic Theory, Elsevier, vol. 12(3), pages 416-442, June.
    4. Aaron, Henry & McGuire, Martin, 1970. "Public Goods and Income Distribution," Econometrica, Econometric Society, vol. 38(6), pages 907-920, November.
    5. Jacob Meerman, 1980. "Are public goods public goods?," Public Choice, Springer, vol. 35(1), pages 45-57, January.
    6. Kovenock, Daniel & Sadka, Efraim, 1981. "Progression under the benefit approach to the theory of taxation," Economics Letters, Elsevier, vol. 8(1), pages 95-99.
    7. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    8. Deacon, Robert T & Shapiro, Perry, 1975. "Private Preference for Collective Goods Revealed Through Voting on Referenda," American Economic Review, American Economic Association, vol. 65(5), pages 943-955, December.
    9. Brennan, Geoffrey, 1976. "Public Goods and Income Distribution: A Rejoinder to the Aaron-McGuire Reply," Econometrica, Econometric Society, vol. 44(2), pages 405-407, March.
    10. Wilde, James A, 1972. "Social Goods, Benefit Taxation and Income Elasticity," Public Finance = Finances publiques, , vol. 27(1), pages 79-81.
    11. Patricia Ruggles & Michael O'Higgins, 1981. "The Distribution Of Public Expenditure Among Households In The United States," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 27(2), pages 137-164, June.
    12. Tresch, Richard W., 2014. "Public Finance," Elsevier Monographs, Elsevier, edition 3, number 9780124158344.
    13. Snow, Arthur & Warren, Ronald Jr., 1983. "Tax progression in Lindahl equilibrium," Economics Letters, Elsevier, vol. 12(3-4), pages 319-326.
    14. Shoven, John B & Whalley, John, 1984. "Applied General-Equilibrium Models of Taxation and International Trade: An Introduction and Survey," Journal of Economic Literature, American Economic Association, vol. 22(3), pages 1007-1051, September.
    15. Maital, Shlomo, 1973. "Public Goods and Income Distribution: Some Further Results," Econometrica, Econometric Society, vol. 41(3), pages 561-568, May.
    16. Brennan, Geoffrey, 1981. "The Attribution of Public Goods Benefits," Public Finance = Finances publiques, , vol. 36(3), pages 347-373.
    17. Hewitt, Daniel, 1985. "Demand for National Public Goods: Estimates from Surveys," Economic Inquiry, Western Economic Association International, vol. 23(3), pages 487-506, July.
    18. repec:bla:revinw:v:27:y:1981:i:2:p:137-64 is not listed on IDEAS
    19. Rubinfeld, Daniel L, 1977. "Voting in a Local School Election: A Micro Analysis," The Review of Economics and Statistics, MIT Press, vol. 59(1), pages 30-42, February.
    20. Michael O'Higgins & Patricia Ruggles, 1981. "The Distribution Of Public Expenditures And Taxes Among Households In The United Kingdom," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 27(3), pages 298-326, September.
    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. Selden, Thomas M. & Wasylenko, Michael J., 1992. "Benefit incidence analysis in developing countries," Policy Research Working Paper Series 1015, The World Bank.

    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. Cormac O'Dea & Ian Preston, 2012. "The distributional impact of public spending in the UK," IFS Working Papers W12/06, Institute for Fiscal Studies.
    2. Kaplow, Louis, 2006. "Public goods and the distribution of income," European Economic Review, Elsevier, vol. 50(7), pages 1627-1660, October.
    3. Geoffrey Philpotts, 1986. "Public Good Benefit Attribution," Public Finance Review, , vol. 14(3), pages 313-328, July.
    4. Udo Ebert, 2003. "Environmental Goods and the Distribution of Income," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 25(4), pages 435-459, August.
    5. Udo Ebert & Georg Tillmann, 2006. "Budget Incidence Reconsidered," Journal of Economics, Springer, vol. 88(1), pages 1-19, June.
    6. Peter J. Lambert & Wilhelm Pfähler, 1988. "On Aggregate Measures of the Net Redistributive Impact of Taxation and Government Expenditure," Public Finance Review, , vol. 16(2), pages 178-202, April.
    7. Paul Burgat & Claude Jeanrenaud, 1996. "Do Benefit and Equal Absolute Sacrifice Rules Really Lead To Different Taxation Levels?," Public Finance Review, , vol. 24(2), pages 148-162, April.
    8. Barbora Slintáková, 2014. "Cost of Service Approach to the Measurement of Public Expenditure Incidence [Nákladový přístup k měření dopadu veřejných výdajů]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2014(2), pages 92-105.
    9. Hines Jr., James R., 2000. "What is benefit taxation?," Journal of Public Economics, Elsevier, vol. 75(3), pages 483-492, March.
    10. Thanos Catsambas, 1982. "Substitutability, Separability, and the Distributional Implications of Public Goods," Public Finance Review, , vol. 10(3), pages 333-353, July.
    11. Richard D. Raymond & Michael Sesnowitz, 1980. "The Distributional Impact of Public Goods," Public Finance Review, , vol. 8(4), pages 397-426, October.
    12. Heinz Welsch, 1992. "A note on lindahl taxes when public goods are inputs to household production," Journal of Economics, Springer, vol. 56(1), pages 99-105, February.
    13. Selden, Thomas M. & Wasylenko, Michael J., 1992. "Benefit incidence analysis in developing countries," Policy Research Working Paper Series 1015, The World Bank.
    14. 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.
    15. G. Tridimas*, 1985. "Budget Deficits and the Growth of Public Expenditure in South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 53(4), pages 251-257, December.
    16. Jiri Skolka, 1985. "Wende in der Arbeitsteilung," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 11(4), pages 445-469.
    17. Felix Schlapfer & Anna Roschewitz & Nick Hanley, "undated". "Contingent valuation and real referendum behaviour," Working Papers 2001_8, Business School - Economics, University of Glasgow.
    18. Schlapfer, Felix & Roschewitz, Anna & Hanley, Nick, 2004. "Validation of stated preferences for public goods: a comparison of contingent valuation survey response and voting behaviour," Ecological Economics, Elsevier, vol. 51(1-2), pages 1-16, November.
    19. Weck-Hannemann, Hannelore, 1989. "Protectionism in direct democracy," Discussion Papers, Series II 79, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    20. Timothy Smeeding, 1984. "Approaches to Measuring and Valuing In-Kind Subsidies and the Distribution of Their Benefits," NBER Chapters, in: Economic Transfers in the United States, pages 139-176, National Bureau of Economic Research, Inc.

    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:sae:pubfin:v:15:y:1987:i:2:p:138-165. 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: SAGE Publications (email available below). General contact details of provider: .

    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.