Optimal public goods provision: implications of endogenizing the labor/leisure choice

Nicholas Flores and Philip Graves ()

MPRA Paper from University Library of Munich, Germany

Abstract: Conventional analysis of public goods provision aggregates individual willinness to pay while treating income as exogenous, ignoring the fact that we generate income to allow us to purchase utility-generating goods. We explore the implications of endogenizing the laborl/leisure decision by explicitly considering leisure demand in a model of public goods provision. We consider benefit analysis of public goods provision and find that increments of the public good will generally be under-valued using conventional analysis while decrements to the public good (rare in public good settings) will be overvalued.

Keywords: environmental economics; willingness-to-pay; willingness-to-accept; valuation; public goods; public goods provision; benefit-cost analysis (search for similar items in EconPapers)
JEL-codes: A1 D0 D61 D7 H4 N5 Q0 (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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