IDEAS home Printed from https://ideas.repec.org/a/sae/pubfin/v7y1979i4p479-500.html
   My bibliography  Save this article

Grant Impact on Local Fiscal Behavior: Full-Information Maximum Likelihood Estimates

Author

Listed:
  • James R. Follain JR

    (Federal Home Loan Bank, San Francisco)

Abstract

A wide variety of econometric studies have been conducted to determine Abstract whether conditional grants have a different effect upon local fiscal behavior than unconditional grants and to determine if unconditional grants reduce tax effort. Unfortunately, the studies have not finally resolved these questions. In this paper, a system of expenditure and tax equations are precisely derived from the Geary-Stone utility function. The system of equations is estimated simultaneously using a Full-Information Maximum Likelihood Estimator and the validity restrictions implied by the Geary-Stone utility function. The results indicate that conditional grants do not generally have a different impact upon local expenditures than unconditional grants and that unconditional grants do not seriously dampen local tax effort. Further, the results indicate that the Geary-Stone model is plausible.

Suggested Citation

  • James R. Follain JR, 1979. "Grant Impact on Local Fiscal Behavior: Full-Information Maximum Likelihood Estimates," Public Finance Review, , vol. 7(4), pages 479-500, October.
    • Handle: RePEc:sae:pubfin:v:7:y:1979:i:4:p:479-500
    DOI: 10.1177/109114217900700404
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/109114217900700404
    Download Restriction: no
    File URL: https://libkey.io/10.1177/109114217900700404?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. Wegge, Leon L F, 1969. "A Family of Functional Iterations and the Solution of Maximum Likelihood Estimating Equations," Econometrica, Econometric Society, vol. 37(1), pages 122-130, January.
    2. David L. Smith, 1968. "The Response Of State And Local Governments To Federal Grant‐In‐Aid Payments," Journal of Finance, American Finance Association, vol. 23(3), pages 553-554, June.
    Full references (including those not matched with items on IDEAS)

    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. Scott L. Minkoff, 2009. "Minding Your Neighborhood: The Spatial Context of Local Redistribution," Social Science Quarterly, Southwestern Social Science Association, vol. 90(3), pages 516-537, September.
    2. Robert G. Mogull, 1978. "State and Local Antipoverty Expenditures," Public Finance Review, , vol. 6(3), pages 287-303, July.
    3. Michael S. Broida, 1977. "Governmental Revenue/ Expenditure Models: a Case for the Simultane Eouation Technique," Public Finance Review, , vol. 5(1), pages 41-60, January.

    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:7:y:1979:i:4:p:479-500. 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.