The Role of Home Production in Voting Over Taxes and Expenditure

John Creedy and Solmaz Moslehi ()

Australian Journal of Labour Economics (AJLE), 2010, vol. 13, issue 1, 81-97

Abstract: This paper investigates, first, how allowance for subsistence activities, or home production, affects the standard results in models involving the majority choice of the tax rate in a flat tax – basic income scheme. The paper extends the analysis of home production to choices regarding the composition of government expenditure, in situations where there is a tax-financed pure public good in addition to a transfer payment, conditional on a given tax rate. The effect of home production is to reduce the transfer payment in each model, but the effect is small.

Keywords: Fiscal Policies; Behaviour of Economic Agents; Household Public Goods; National Government Expenditures and Related Policies: General; Time Allocation and Labour Supply (search for similar items in EconPapers)
JEL-codes: H31 H41 H50 J22 (search for similar items in EconPapers)
Date: 2010
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