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Social Status Concerns and the Political Economy of Publicly Provided Private Goods

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  • Friedrichsen, Jana
  • König, Tobias
  • Lausen, Tobias

Abstract

We analyse the political economy of the public provision of private goods when individuals care about their social status. Status concerns motivate richer individuals to vote for the public provision of goods they themselves buy in markets: a higher provision level attracts more individuals to the public sector, enhancing the social exclusivity of market purchases. Majority voting may lead to a public provision that only a minority of citizens use. Users in the public sector may enjoy better provision than users in the private system. We characterise the coalitions that can prevail in a political equilibrium.

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  • Friedrichsen, Jana & König, Tobias & Lausen, Tobias, 2021. "Social Status Concerns and the Political Economy of Publicly Provided Private Goods," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 131(633), pages 220-246.
    • Handle: RePEc:zbw:espost:222640
    DOI: 10.1093/ej/ueaa076
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    5. Désirée I Christofzik & Sebastian G Kessing, 2024. "On the public provision of positional goods," Oxford Economic Papers, Oxford University Press, vol. 76(3), pages 708-721.

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    More about this item

    Keywords

    in-kind provision; status preferences; majority voting;
    All these keywords.

    JEL classification:

    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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