Encouraging Private Ownership of Public Goods: Theory and Evidence from Belgium
Gani Aldashev (),
Joaquin Morales Belpaire () and
Astrid Similon ()
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Astrid Similon: CRED and Department of Law University of Namur
No 1408, Working Papers from University of Namur, Department of Economics
We study short-run and long-run effects of a government subsidy to private nonprofit ownership of public good projects. In a simple model, we show that the subsidy increases the prices of project assets in the short run; however, the effect does not persist and prices decline in the long run. This happens because the subsidy temporarily relaxes the resource constraint of non-profit organizations, which allows them to engage in supply-expanding activities. We test this prediction using a unique dataset that we have constructed from Belgian notarial land-transaction records and exploiting a policy reform in public subsidies for land purchases by non-profits aiming at creating privately owned natural reserves. Using the MS-estimation method (Maronna and Yohai, 2000) robust to outliers, we also provide a methodological contribution to the analysis of markets with quasi-donations.
Keywords: non-profit organizations; public goods; fundraising; land markets; natural reserves; conservation (search for similar items in EconPapers)
JEL-codes: H41 L22 L31 N5 Q26 (search for similar items in EconPapers)
Pages: 36 pages
New Economics Papers: this item is included in nep-agr
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http://www.fundp.ac.be/eco/economie/recherche/wpseries/wp/1408.pdf First version, 2014 (application/pdf)
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Persistent link: https://EconPapers.repec.org/RePEc:nam:wpaper:1408
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