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A Demand-Theoretic Analysis of Public Consumption Priorities in the United Kingdom

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  • George Tridimas

    (University of Reading)

Abstract

In the tradition of empirical studies of demand for public expenditure, this article examines the allocation of public consumption expenditures in the United Kingdom from 1963 to 1996. In addition to obtaining estimates of the effects of relative prices, total expenditure, and demographic variables, the results reveal that the constraints of homogeneity and symmetry cannot be rejected. However, the results reject the assumption of exogeneity of total expenditure employed by previous authors, so that it is important to augment the standard empirical specification by an auxiliary equation describing the evolution of the total expenditure conditioning variable. Finally, there is also evidence that some of the relationships studied have not been stable during the sample period.

Suggested Citation

  • George Tridimas, 1999. "A Demand-Theoretic Analysis of Public Consumption Priorities in the United Kingdom," Public Finance Review, , vol. 27(6), pages 599-623, November.
    • Handle: RePEc:sae:pubfin:v:27:y:1999:i:6:p:599-623
    DOI: 10.1177/109114219902700603
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    References listed on IDEAS

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    10. Pitarakis, Jean-Yves & Tridimas, George, 1999. "Total expenditure endogeneity in a system of demand for public consumption expenditures in the UK," Economic Modelling, Elsevier, vol. 16(2), pages 279-291, April.
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