AN ECONOMIC INTERPRETATION OF VOTING BEHAVIOUR ON PUBLIC FINANCE ISSUES

RenÉ L. Frey and Leopold Kohn

Kyklos, 1970, vol. 23, issue 4, 792-805

Abstract: In this paper the voting behaviour on public finance issues is examined. The authors presuppose that individuals do reveal their true preferences in referenda and that, therefore, it is possible to explain their underlying utility calculus. For this purpose different cost concepts are introduced: (1) private opportunity costs (benefits from alternative private expenditures), (2) public opportunity costs (benefits from alternative public expenditures), and (3) expected tax increases. Having analyzed theoretically the weight these different cost categories have in the utility calculus of the voters of different income classes, the determinants of the utility of public projects are examined. The results of this theoretical reasoning are tested empirically in the last part of the paper by using poll‐data from the canton Basel‐Stadt (Switzerland). On the whole the empirical tests confirm the derived hypotheses.

Date: 1970
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