IDEAS home Printed from https://ideas.repec.org/a/sae/pubfin/v9y1981i4p371-394.html
   My bibliography  Save this article

Price Discrimination and Federal Project Grants

Author

Listed:
  • Howard A. Chernick

    (U.S. Dept. of Health and Human Services)

Abstract

A discriminating monopoly model of bureaucratic behavior was developed to explain the distribution of project grants to state and local governments. By varying matching rates according to differences in the elasticity of each community's offer curve, the grant administrator attempted to maximize the expenditure inducement effect per dollar of federal aid. The implication is that the allocational effects of intergovernmental aid depend both on local reaction functions and on the degree of bureaucratic discretion in the distribution of aid. The model was tested using the HUD Basic Water and Sewer project grant, and it is shown that matching rates vary systematically with a community's own expenditure level, its per capita income, and its population. Price discrimination was found to increase over time, leading to an increase in expenditures mandated by the grant.

Suggested Citation

  • Howard A. Chernick, 1981. "Price Discrimination and Federal Project Grants," Public Finance Review, , vol. 9(4), pages 371-394, October.
    • Handle: RePEc:sae:pubfin:v:9:y:1981:i:4:p:371-394
    DOI: 10.1177/109114218100900401
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/109114218100900401
    Download Restriction: no
    File URL: https://libkey.io/10.1177/109114218100900401?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. Martin C. McGuire & Harvey A. Garn, 1969. "Problems in the Cooperative Allocation of Public Expenditures," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 83(1), pages 44-59.
    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. Riemer P. Faber & Pierre Koning, 2017. "Why not fully spend a conditional block grant?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 24(1), pages 60-95, February.
    2. Riemer P. Faber & Pierre Koning, 2017. "Why not fully spend a conditional block grant?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 24(1), pages 60-95, February.
    3. Brian Knight, 2000. "The flypaper effect unstuck: evidence on endogenous grants from the Federal Highway Aid Program," Finance and Economics Discussion Series 2000-49, Board of Governors of the Federal Reserve System (U.S.).

    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. Gramlich, Edward M. & Ysander, Bengt-Christer, 1980. "Relief Work and Grant Displacement in Sweden," Working Paper Series 30, Research Institute of Industrial Economics.
    2. Glenn Dixon, 1970. "Outputs of minority entrepreneurship programs," The Review of Black Political Economy, Springer;National Economic Association, vol. 1(1), pages 3-17, March.

    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:9:y:1981:i:4:p:371-394. 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.