An Examination of Preferences for Local Public Sector Outputs

Melville McMillan and Joe Amoako-Tuffour

The Review of Economics and Statistics, 1988, vol. 70, issue 1, 45-54

Abstract: Relatively unique data on the costs of public services for local governments in Victoria, Australia, are used to estimate a system of demand equations and to test alternative specifications of the underlying preferences using a translog model. Symmetry conditions are rejected so the data are not consistent with constrained utility maximization. A nonparametric test confirms that result. Conditional on symmetry, tests reject homogeneity and the additivity of preferences and also the separability of personal and property services. Copyright 1988 by MIT Press.

Date: 1988
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