Support for Public Provision with Top-Up and Opt-Out: A Controlled Laboratory Experiment

Neil Buckley, Katherine Cuff, Jeremiah Hurley, Stuart Mestelman, Stephanie Thomas and David Cameron ()

Department of Economics Working Papers from McMaster University

Abstract: We empirically test the predictions of political economy models regarding public support for a publicly provided private good financed with proportional income taxes when individuals can purchase the good privately and either continue to consume public provision ('top-up') or forego public provision ('opt-out'). Our laboratory results confirm the predicted majority-preferred tax rate in the mixed financing with top-up treatment, but find significantly higher rates than predicted in the mixed financing with opt-out treatment. Using non-parametric regression analysis, we also explore the relationship between individuals' top-up and opt-out decisions and both their income levels and the implemented tax rates.

Keywords: publicly provided private good; mixed financing; voting experiment (search for similar items in EconPapers)
JEL-codes: C91 D78 H42 H44 (search for similar items in EconPapers)
Pages: 89 pages
Date: 2013-11
New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-exp, nep-nps and nep-pbe
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Persistent link: https://EconPapers.repec.org/RePEc:mcm:deptwp:2013-15

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