Interrelationships among public spending preferences: A micro analysis

James Ferris

Public Choice, 1985, vol. 45, issue 2, 139-153

Abstract: This paper examines a system of qualitative demand equations for public spending on education, welfare, housing, health, highways, and defense. The demand for public spending for a particular category is hypothesized to be a function of income, tax-price, private benefit measures, and tastes as well as demands for other public expenditure categories. Based on individual survey data, the conditional maximum likelihood estimates of the logit equations are obtained. The results indicate the significant role of tastes, private benefit variables, and tax-prices. In addition, positive rather than negative, demand interrelationships are found to exist. These findings question the validity of the median voter hypothesis as a model for public budget allocation. Copyright Martinus Nijhoff Publishers 1985

Date: 1985
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DOI: 10.1007/BF00215061

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