 Japanese government and utilitarian behaviorJournal of the Japanese and International Economies, 2015, vol. 36, issue C, 90-107 Abstract: When optimal policies for governments are studied in economics, social welfare functions are often used, but the functions are typically unobservable. This paper estimates the social welfare function of Japan’s central government from FY 1955 to 2010. We assume that the central government determines its subsidies to the local governments of prefectures to maximize a social welfare function, which is assumed to be a weighted sum of the utility of a representative resident of each prefecture. The weight on each prefecture is estimated from the amounts of subsidies using the method developed by Iritani and Tamaoka (2005). Using regression analysis, we show that the weight on a prefecture is approximately equal to the prefecture’s population. The correlation coefficient between weights and populations is 0.969. This implies that the social welfare function is approximately the (unweighted) sum of the utilities of all individuals in the entire country, that is, utilitarian with identical weights on all individuals. Keywords: Utilitarian social welfare; Subsidies to local governments; Local public finance; Vote value (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jjieco:v:36:y:2015:i:c:p:90-107 DOI: 10.1016/j.jjie.2014.11.004 Access Statistics for this article Journal of the Japanese and International Economies is currently edited by Takeo Hoshi More articles in Journal of the Japanese and International Economies from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.