Off-the-peak preferences over government size

Francisco Martínez-Mora and M. Socorro Puy

No 2010-05, Working Papers from FEDEA

Abstract: We show that preferences-bias towards overprovision or underprovision can explain the asymmetric location of electoral candidates with respect to the median voter. We analyze the determinants of preferences off-the-peak and find that: (i) The sign of the third derivative of the policy-induced utility function indicates whether preferences are bias towards overprovision (positive) or underprovision (negative). (ii) The analog of Kimball's coefficient of prudence can be used to measure the asymmetry of preferences. (iii) Consumers’risk aversion and government corruption (in the form of decreasing effectiveness producing public good) induce voters’ preferences to be more intense towards underprovision.

Date: 2010-02
New Economics Papers: this item is included in nep-cdm, nep-pbe, nep-pol, nep-pub and nep-upt
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Related works:
Working Paper: Off-the-peak preferences over government size* (2010)
Working Paper: Off-the-peak preferences over government size (2009)
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