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Title: Heterogeneous Preferences and Provision of Public Goods

Citation Type: Miscellaneous

Publication Year: 2013

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Abstract: This paper examines the role of social classes cleavages on in-kind redistribution. In presence of heterogeneous income as well as heterogeneous preferences over the types of public goods provided, the total amount of redistribution depends on the distance between those preferences. Under very general assumptions, we describe an environment in which the more a society is fractionalized, the less redistribution we can expect. In particular, with respect to the baseline model with heterogeneous incomes but homogeneous preferences over public goods, social distance decreases the amount of public goods preferred by all individuals. Our paper innovates the previous literature on this topic under two main perspectives: it allows for heterogeneity in both income and preferences and it considers an N-dimensional policy space. An empirical investigation based on US survey data confirms the main result of our theoretical model, that more heterogeneous societies provide a lower quantity of public goods to their members, while more unequal societies in terms of income experience more in-kind redistribution.

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Authors: Bellani, Luna; Scervini, Francesco

Publisher: The Selected Works of Francesco Scervini

Data Collections: IPUMS CPS

Topics: Other

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