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Do Local Governments Represent Voter Preferences? Evidence from Hospital Financing under the Affordable Care Act

Author

Listed:
  • Victoria Perez
  • Justin M. Ross
  • Kosali I. Simon

Abstract

A mainstream motivation for decentralized government is to enable public service investments to better align with political preferences that may differ by geographical region. This paper examines how political preferences determine local government provision of hospital services. We find that local governments in areas more supportive of public insurance expansion responded to such state action by increasing expenditures on hospitals, whereas those in areas that voted against such expansions used the savings to reduce property taxes. This finding suggests that local government financial responses indeed align with political preferences.

Suggested Citation

  • Victoria Perez & Justin M. Ross & Kosali I. Simon, 2019. "Do Local Governments Represent Voter Preferences? Evidence from Hospital Financing under the Affordable Care Act," NBER Working Papers 26094, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:26094
    Note: EH PE
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    File URL: http://www.nber.org/papers/w26094.pdf
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    Cited by:

    1. Pengju Zhang & Ling Zhu, 2021. "Does the ACA Medicaid Expansion Affect Hospitals’ Financial Performance?," Public Finance Review, , vol. 49(6), pages 779-814, November.
    2. Victoria Perez & Joseph A. Benitez & Justin Ross, 2021. "Too small to fail: The role of Medicaid in mitigating pandemic‐related fiscal strain on local governments," Public Budgeting & Finance, Wiley Blackwell, vol. 41(3), pages 74-97, September.

    More about this item

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • I1 - Health, Education, and Welfare - - Health
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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