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Heterogeneous preferences and in-kind redistribution: Theory and evidence

Luna Bellani () and Francesco Scervini ()

European Economic Review, 2015, vol. 78, issue C, 196-219

Abstract: This paper examines the impact of social heterogeneity on in-kind redistribution. We contribute to the previous literature in two ways: we consider (i) the provision of several public goods and (ii) agents different not only in income, but also in their preferences over the various goods provided by the public sector. In this setting, both the distribution and size of goods provision depend on the heterogeneity of preferences. Our main result is that preference heterogeneity tends to decrease in-kind redistribution, while income inequality tends to increase it. An empirical investigation based on United States Census Bureau data confirms these theoretical findings.

Keywords: Heterogeneous preferences; In-kind redistribution; Voting; Social distance; Local public budgets (search for similar items in EconPapers)
JEL-codes: D31 D72 H42 H70 (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1016/j.euroecorev.2015.06.001

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