EVALUATING THE SOCIAL OPTIMALITY OF DURABLE PUBLIC GOOD PROVISION USING THE HOUSING PRICE RESPONSE TO PUBLIC INVESTMENT

• 成果类型: Article
• 署名作者: Coate, Stephen; Ma, Yanlei
• 署名单位: Cornell University; Cornerstone Research
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12207
• 发表日期: 2017
• 页码: 3-31
• 关键词: property-values; resource-allocation; political-economy; voters; capitalization; expenditure; bureaucrats; EFFICIENCY; MARKET; taxes

摘要

Recent empirical work in public finance uses the housing price response to public investment to assess the efficiency of local durable public good provision. This article explores the theoretical justification for this technique. It points out that the logic justifying the technique for evaluating nondurable public good provision does not translate to the durable case. A model in which investment is determined by the interaction between a budget-maximizing bureaucrat and a community's residents is used to demonstrate that the technique can falsely predict underprovision, falsely predict overprovision, or perform without error.