Professor Nora Gordon
Office: Economics 328
Email: negordon@ucsd.edu
ECONOMICS 231
PUBLIC ECONOMICS: GOVERNMENT EXPENDITURES
Mon./Wed. 11:00-12:20, Economics 304
http://econ.ucsd.edu/faculty/negordon/econ231/econ231home.html
This course covers the role of government expenditures in the economy. We will begin with a discussion of optimal government expenditure and the public goods problem. We then cover a sampling of topics at the intersection of political economy and public finance. Next, we consider public finance in a system with multiple jurisdictions, and review empirical research on public education. Each topic in the course will be motivated by the theoretical work in the relevant area, but the emphasis of the course is empirical. A main goal of the course is to teach you how to conduct and evaluate empirical research on government expenditure programs. The most important topics in government expenditures that are not included in this course are social insurance and redistribution, which are covered in Julie Cullen’s public economics course. Taxation is covered in Roger Gordon’s public economics course and not in this course.
COURSE REQUIREMENTS:
This course requires a paper proposal (in two drafts), presentation of the final proposal, presentation of one assigned paper, one referee report, and a final exam.
|
Assignment |
Due date |
Weight in course grade |
|
Presentation of assigned paper |
Depends on paper chosen; sign up for paper in class April 2 |
5% |
|
Meet with me before first draft |
Before May 1, by appointment |
|
|
First draft paper proposal |
In class May 14 |
15% |
|
Referee report |
In class May 7 |
10% |
|
Final paper proposal |
June 6, by 4:30 p.m. |
25% |
|
Presentation of paper proposal |
June 2 or 4 |
5% |
|
Final exam |
June 13 |
40% |
Each student must meet with me individually at least once before May 1 to discuss the proposal before submitting a first draft. Come to the meeting with a question—even if you suspect it is too broad or too narrow—and a list of at least four related papers you have found, including at least one unpublished paper.
Academics frequently write referee reports for journals, advising editors whether to publish papers and if so, with what revisions. These reports begin with a brief summary of the paper, but spend most of their (2-3 page single-spaced) text critiquing the paper and providing suggestions for improvement. In order to ensure that you are familiar with the most recent research related to your paper proposal, you will write a referee report on an unpublished paper related to your topic (it is okay if the paper has been accepted for publication). You can find unpublished papers through NBER, IZA, departmental working paper series, Google Scholar, SSRN, or the author’s webpage. This paper need not be issued as part of any formal working paper series.
The first draft of the paper proposal (about 10 pages) will pose a question in public economics, motivate that question, and place it in the context of the existing literature. The second draft must refine the first draft, and, additionally, describe an appropriate data set (that actually exists) and empirical methodology for answering the question. You may write a theoretical paper if you prefer; we will discuss how theoretical paper will evolve between drafts on a case-by-case basis. The goal of this assignment is for you to have a “blueprint” for carrying out an original research project. I encourage you to discuss your progress and future directions with me frequently during this process. More detailed paper proposal guidelines follow.
Note: there will be no class Monday, April 14. Instead, we will meet Friday, April 18 from 2:00-3:20 in Economics 304.
Paper proposal
assignment guidelines
The format I describe here will help you set out the skeleton of an applied paper, which you can “fill in” after the class (as a second-year econometrics project or third-year paper, for example). These guidelines are flexible and we can discuss what would be most useful on a case-by-case basis (for example, if you are further along with a project already, or if you wish to write a theoretical paper). If you are just starting an applied project, however, these are the criteria I think are most helpful for eventually writing a paper, and therefore the criteria upon which the assignments will be graded.
1. Define your question
Getting started is often the most difficult part. The point of this project is to move you beyond a point where you are interested in public economics, or even a more restricted area such as education policy, to a point where you can phrase your interest as a question. Looking through articles (skim through the Journal of Public Economics) or unpublished papers (look through the Public Economics working paper series at the NBER online) will help you identify the appropriate scope for a question. When in doubt, make it narrower to ensure that you will be able to answer it completely.
2. Motivate your question
You can do this in several ways. It is crucial that you convince the reader that this is an interesting and important question, whether theoretically or for policy purposes or both. This should happen right away, after stating the question. You should also review the literature to the extent necessary to show interest in the general area and that this particular question is not well answered already. Rather than writing a lengthy literature review on the broader topic, discuss the literature in relation to your question.
3. Show that you will be able to answer your
question (add to final proposal, not needed for first draft)
Discuss your empirical strategy and the data you plan to use. Be very clear about how you will credibly identify exogenous variation and therefore estimate a causal relationship. If you are using a new or unusual econometric method, review the methodological literature here as well. In this case, discuss only the aspects that are necessary to understand your paper.
A good strategy here is to start by thinking about what your ideal data would be, then see what data exist, and then decide if they are sufficient. It is likely that you will first come up with some questions that are interesting, important, and unanswered, only to realize that they are unanswered for a reason. Try not to be discouraged and to view it as part of the research process. The more specific you can be about what you are going to do, the better. Include equations to be specified and blank table shells for results.
4. Explain how you will interpret your findings
(add to final proposal, not needed for first draft)
Now that you have your blank table shells, how should we interpret what eventually will fill them? It is always good to put a coefficient reported in a table in a sentence so the reader can interpret it. For now, you can call that coefficient “X” or whatever you like as a placeholder, but you should try writing the sentence. This part of the assignment is important for helping you think about how specific the results are to your empirical setting (and remembering that local average treatment effects are local!).
Class calendar
(subject to revision)
|
Monday |
Wednesday |
|
Mar. 31 Introduction to course What is public economics? *Feldstein |
Apr. 2 Sign up for paper to present Externalities -- theory *Laffont Ch. 1 |
|
Apr. 7 Externalities -- empirical *Chay and Greenstone; |
Apr. 9 Public goods -- theory *Laffont Ch. 2 |
|
*Apr. 14—no
class meeting, rescheduled to Friday* For Wed. Apr. 16 Public goods – empirical *Andreoni; Fischel; Brunner
& Sonstelie |
Friday Apr. 18 Social choice *Laffont Ch. 4 and 5 |
|
Apr. 21 Empirical estimates of
demand for public goods Hedonic estimates Demand analysis *Black; Gyurko & Tracy;
Gramlich & Rubinfeld |
Apr. 23 Empirical estimates of
demand for public goods Flypaper effect *Gordon; Knight |
|
Apr. 28 Political economy I *Besley & Coate; Baron
& Ferejohn |
Apr. 30 Political economy II *Cutler, Elmendorf, &
Zeckhauser; Lee, Moretti, & Butler |
|
May 5 Political economy: endogenous borders *Alesina & Spaolare;
Alesina, Hoxby, & Baqir |
May 7 Referee report due in class Public finance with
multiple jurisdictions Tiebout model Club goods *Rubinfeld; Scotchmer |
|
May 12 Public finance with
multiple jurisdictions Empirical *Farnham & Sevak; Hoxby |
May 14 Paper proposal draft 1 due in class Public finance with
multiple jurisdictions Intergovernmental grants Empirical evidence on grants *Baicker & Staiger;
Cullen |
|
May 19 Elementary and secondary
education in the School finance *Fernandez & Rogerson;
Hoxby |
May 21 Elementary and secondary
education in the US The production of education *Hanushek; Jacob |
|
May 26 Memorial Day No class |
May 28 Higher education *Dynarski; Dynarski;
Peltzman |
|
June 2 Student research presentations |
June 4 Student research presentations |
|
FRIDAY June 6 Paper proposal draft 2 due |
FRIDAY June 13 Final exam 11:30-2:30 |
READINGS: Required readings are in bold. Most should be on JSTOR.
Index of Journal
Abbreviations
AER = American Economic
Review
EMA = Econometrica
JEL = Journal of Economic
Literature
JEP = Journal of Economic
Perspectives
JHR = Journal of Human
Resources
JOLE = Journal of Labor
Economics
JPE = Journal of Political Economy
JPubE = Journal of Public
Economics
NTJ = National Tax Journal
QJE = Quarterly Journal of
Economic
REStat = Review of Economics
and Statistics
REStud = Review of Economic
Studies
General References
A. Atkinson and J. Stiglitz,
Lectures in Public Economics (New York: McGraw Hill, 1980).
A. Auerbach and M.
Feldstein, eds., Handbook of Public Economics: Volumes 1 & 2
(Amsterdam: North Holland, 1985 and 1987).
*J. Laffont, Fundamentals of Public Economics (Cambridge: MIT
Press, 1988). Note: this is an e-book from UCSD library, not in
UCSD bookstore, available new and used on Amazon.
G. Myles, Public
Economics (New York: Cambridge University Press, 1995).
H. Rosen, Public Finance,
6th edition (
J. Stiglitz, Economics of
the Public Sector, 2nd edition (New York: Norton, 1988).
Note: Some papers listed as working papers may now
be published in journals and not cited here.
0.
Introduction to the Course
*M. Feldstein, “The Transformation of Public Economics Research:
1970-2000,” Journal of Public Economics, 86.3 (December
2002), 319-26.
http://www.nber.org/feldstein/publiceconomics.html
1. Optimal Expenditure Policy
1.1 Externalities
J. Andreoni and A.
Levinson, “The Simple Analytics of the Envrironmental Kuznets Curve,” Journal
of Public Economics, v 80, 2001, 269-286.
A. L. Bovenberg and R.
A. de Mooij, “Environmental Levies and Distortionary Taxation,” American
Economic Review, September 1994, 1085--1089.
*K. Chay and
M. Greenstone, “The Impact of
Air Pollution on Infant Mortality: Evidence from Geographic Variation in
Pollution Shocks Induced by a Recession.” Quarterly Journal of Economics, 118(3) (August 2003).
http://econ-www.mit.edu/faculty/download_pdf.php?id=838
R. Coase, “The Problem
of Social Cost,” Journal of Law and Economics, 1960, 1--44.
*T. Dee, “Are There
Civic Returns to Education?” Journal
of Public Economics 88 (9), August 2004, 1697-1720.
http://www.swarthmore.edu/SocSci/tdee1/Research/jpubec04.pdf
A. Dixit, and M.
Olson, “Does Voluntary Participation Undermine the Coase Theorem?” Journal
of Public Economics, June 2000, 309-336.
L. Ebrill and
D.
D.
J. Greenwood and R. P.
McAfee, “Externalities and Assymetric Information,” Quarterly Journal of
Economics, February 1991, 103--122.
G. Harden, “The
Tragedy of the Commons,” Science, 1968, December.
Laffont, Chapter 1.
G. Metcalf,
“Environmental Levies and Distortionary Taxation,” Journal of Public
Economics, February 2003, 87(2), 313-322.
1.2 Efficient Public Goods Provision
A. Atkinson and N. Stern,
"Pigou, Taxation and Public Goods," REStud 41 (1974), 119-128.
A. Atkinson and J.
Stiglitz, Chapter 16.
C. Ballard and D.
R. Boadway and M. Keen,
"Public Goods, Self-selection, and Optimal Income Taxation," International Economic Review 34 (1993),
463-78.
T. Gaube, "When do
Distortionary Taxes Reduce the Optimal Supply of Public Goods?," JPubE 76 (2000), 151-180.
L. Kaplow, "The Optimal
Supply of Public Goods and the Distortionary Cost of Taxation," NTJ 49 (1996), 513-533.
M. King, "A Pigouvian
Rule for the Optimal Provision of Public Goods," JPubE 30 (1986), 273-292.
*J. Laffont, Chapter 2.
G. Myles, Chapter 9.
P. Samuelson, "The Pure
Theory of Public Expenditure," REStat
36 (1954), 387-389.
J. Wilson, "Optimal
Public Good Provision with Limited Lump-Sum Taxation," AER 81 (1991), 153-66.
1.3 Voluntary Private Provision of Public Goods
J. Andreoni, "Impure
Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal 100(401) (1990),
464-77.
*J. Andreoni, "An Experimental Test of the Public Goods Crowding
Out Hypothesis," AER 83
(December 1993), 1317-27.
J. Andreoni and T.
Bergstrom, "Do Government Subsidies Increase the Private Supply of Public
Goods?," Public Choice 88
(1996), 295-308.
T. Bergstrom, L. Blume, and
H. Varian, "On the Private Provision of Public Goods," JPubE 29 (1986), 25-49.
*E. Brunner and J. Sonstelie, "School Finance
Reform and Voluntary Fiscal Federalism," Journal of Public Economics, 2003,
87(9-10) 2157-2185.
C. Clotfelter, Federal
Tax Policy and Charitable Giving (Chicago: University of Chicago Press,
1985), Chapters 1 and 2.
*W. Fischel, "Did Serrano Cause Proposition 13?," NTJ 42 (December 1989), 465-473.
L. Kaplow, "A Note on
Subsidizing Gifts," JPubE 58
(1995), 469-78.
B. Kingma, "An Accurate
Measurement of the Crowd-Out Effect, Income Effect, and Price Effect for
Charitable Contributions," JPE
97 (1989), 1197-1207.
J. Ledyard, "Public
Goods: A Survey of Experimental Research," in J. Kagel and A. Roth, eds., The
Handbook of Experimental Economics (Princeton: Princeton University Press,
1995), 111-194.
E. Ley, "On the Private
Provision of Public Goods, A Diagrammatic Approach," Investigaciones Economicas 20(1) (1996), 691-704.
J. Morgan, "Financing
Public Goods by Means of Lotteries," REStud
67(4) (2000), 761-84.
R. Roberts, "Financing
Public Goods," JPE 95 (1987),
420-437.
J. Weimann, "Individual
Behavior in a Free Riding Experiment," JPubE
54 (1994), 185-200.
1.4 Providing Public Goods with Perfect and with Asymmetric Information
A. Atkinson and J. Stiglitz,
Chapter 10.
R. Barnett, “Preference
Revelation and Public Goods” in P. Jackson, ed., Current Issues in Public
Sector Economics (New York: St. Martin’s Press, 1992), 94-131.
T. Bergstrom and R. Cornes,
"
Y. Chen and C. Plott,
"The
Y. Chen and F. Tang,
"Learning and Incentive-Compatible Mechanisms for Public Goods Provision:
An Experimental Study," JPE 106
(1998), 633-62.
E. Clarke, "Multipart
Pricing of Public Goods," Public
Choice 8 (1971), 19-33.
T.
E. Lindahl, "Just
Taxation - A Positive Solution,"
in R. Musgrave and A. Peacock, eds., Classics in the Theory of Public
Finance (New York: St. Martin’s Press, 1994).
H. Varian, "A Solution
to the Problem of Externalities When Agents are Well-Informed," AER 84 (December 1994), 1278-1293.
1.5 Social Choice Theory: The Median Voter Model
K. Arrow, Social Choice
and Individual Values (Yale University Press, 1963).
T. Bergstrom, "When
Does Majority Rule Supply Public Goods Efficiently?" Scandinavian Journal of Economics (1979), 216-226.
H. Bowen, "The
Interpretation of Voting in the Allocation of Resources," QJE 58 (1943), 27-48.
A. Caplin and B. Nalebuff,
"On 64% Majority Rule," EMA
56 (1988), 787-814.
A. Denzau and R. MacKay,
"Benefit Shares and Majority Voting," AER 66 (1976), 69-76.
T. Feddersen and
T. Feddersen and
A. Gibbard,
"Manipulation of Voting Schemes: A General Result," EMA 41 (1973), 587-600.
*J. Laffont, Chapters 4 and 5.
J. Ledyard, "The Pure
Theory of Large Two Candidate Elections," Public Choice 44 (1984), 7-41.
J. Levin and B. Nalebuff,
"An Introduction to Vote-Counting Schemes," JEP 9(1) (1995), 3-26.
C. Plott, "A Notion of
Equilibrium and its Possibility Under Majority Rule," AER 57 (1967), 787-806.
A. Sen, Collective Choice
and Social Welfare (San Francisco: Holden Day, 1970), Chapters 1-3.
K. Shepsle,
"Institutional Arrangements and Equilibrium in Multidimensional Voting
Models," American Journal of
Political Science 23 (1979), 23-59.
N. Tideman and G. Tullock,
"A New and Superior Process for Making Social Choices," JPE 84 (1976), 1145-1159.
1.6 Estimating the Demand for Public Goods
T. Bergstrom, D. Rubinfeld,
and P. Shapiro, "Micro-based Estimates of Demand Functions for Local
School Expenditures," EMA 50
(September 1982), 1183-1205.
*S. Black, “Do Better Schools Matter?
Parental Valuation of Elementary Education,” QJE 114(2) (1999), 577-.
D. Brookshire, M. Thayer,
*J. Gyourko and J. Tracy, "The Structure of Local Public Finance
and the Quality of Life," JPE 99
(August 1991), 774-806.
*E. Gramlich and D. Rubinfeld, "Micro Estimates of Public Spending
Demand Functions and Tests of the Tiebout and Median Voter Hypotheses," JPE 90 (June 1982), 536-560.
W. Oates, "Estimating
the Demand for Public Goods: The Collective Choice and Contingent Valuation
Methods," in D. Bjornstad and J. Kahn, eds., The Contingent Valuation
of Environmental Resources: Methodological Issues and Research Needs
(Brookfield, VT: Ashgate, 1996), 211-30.
C. Randall, "Price
Specification and the Demand for Public Goods," JPubE 43 (1990), 93-106.
J. Roback, "Wages,
Rents, and the Quality of Life," JPE
(1982), 1257-1276.
J. Schwab and E. Zampelli,
"Disentangling the Demand Function from the Production Function for Local
Public Services: The Case for Public Safety," JPubE 33 (1987), 245-260.
V. Smith and Y. Kaoru,
"The Hedonic Travel Cost Model: A View from the Trenches," in V.
Smith, Estimating Economic Values for Nature: Methods for Non-Market
Valuation (Cheltenham, U.K.: Elgar, 1987), pp.214-27.
1.7 Empirical Tests of the Median Voter Model
J. Cullen, "The
Incidence of Special Education Mandates," MIT mimeo (1997).
R. Fisher, "Income and
Grant Effects on Local Expenditure: The Flypaper Effect and Other
Difficulties," Journal of Urban
Economics 12 (1982), 324-345.
*N. Gordon, “Do
J. Hines and R. Thaler,
"Anomalies: The Flypaper Effect," JEP
9 (Fall 1995), 217-226.
*B. Knight, “Endogenous Federal Grants and Crowd-out of State
Government Spending: Theory and Evidence
from the
H. Ladd, "State
Responses to TRA86 Revenue Windfalls," Journal
of Policy Analysis and Management 12 (1993), 82-103.
K. Strumpf, "A
Predictive Index for the Flypaper Effect," JPubE 69(3) (1998), 389-412.
2. The Political Economy of Government
2.1 The Scope and Growth of Government
D. Bellante and P. Porter,
"Public and Private Employment over the Business Cycle: A Ratchet Theory
of Government Growth," Journal of
Labor Research 19 (1998), 613-28.
T. Borcherding, "The
Causes of Government Expenditure Growth: A Survey of the
D. Feenberg and H. Rosen,
"Tax Structure and Public Sector Growth," JPubE 32 (1987), 185-201.
J. Ferris and E. West,
"The Cost Disease and Government Growth: Qualifications to Baumol," Public Choice 89 (1996), 35-52.
C. Holsey and T.
Borcherding, "Why Does Government’s Share of National Income Grow?: An
Assessment of the Recent Literature on the U.S. Experience," in D.
Mueller, Perspectives on Public Choice (Cambridge: Cambridge University
Press, 1997).
J. Matsusaka, "Fiscal
Effects of the Voter Initiative: Evidence from the Last 30 Years," JPE 103 (June 1995), 587-622.
S. Peltzman, "The
Growth of Government," Journal of
Law and Economics 23 (1980), 209-287.
S. Peltzman, "Voters as
Fiscal Conservatives," QJE 107
(1992), 327-362.
T. Persson, G. Roland, and
G. Tabellini, "Comparative Politics and Public Finance," JPE 108 (2000), 1121-61.
*T. Persson and G.
Tabellini, "Political Economics and Public Finance," NBER Working
Paper 7097 (1999).
K. Shepsle and B. Weingast,
"Political Solutions to Market Problems," American Political Science Review 78 (1984), 417-434.
2.2 Bureaucrats and Elected Officials
A. Alesina and D. Rodrik,
"Distributive Politics and Economic Growth," QJE 109 (May 1994), 465-490.
A. Banerjee, "A Theory
of Misgovernance," QJE 112
(1997), 1289-1332.
*D.
Baron and J. Ferejohn, "Bargaining in Legislatures," American Political Science Review 83(4)
(1989), 1181-1206.
*T. Besley
and S. Coate, “An
Economic Model of Representative Democracy”, QJE 108(1) (1997), 85-114.
M. Fiorina and R. Noll,
"Voters, Bureaucrats, and Legislators: A Rational Choice Perspective on
the Growth of Bureaucracy," JPubE
9 (1978), 239-255.
K. Forbes and E. Zampelli,
"Is Leviathan a Mythical Beast?," AER
79 (1989), 568-77.
J. Heckman, J. Smith, and C.
Taber, "What Do Bureaucrats Do? The
Effects of Performance Standards and Bureaucratic Preferences on Acceptance
into the JTPA Program," in G. Libecap, ed., Reinventing Government and
the Problem of Bureaucracy (Greenwich, CT: JAI Press, 1996), 191-217.
J. Laffont, "Political
Economy, Information, and Incentives," European
Economic Review 43 (1999), 649-669.
M. Marlow, "Fiscal
Decentralization and Government Size," Public
Choice 56(3) (March 1988), 259-69.
G. Miller, "The Impact
of Economics on Contemporary Political Science," JEL 35 (1997): 1173-1204.
G. Miller and T. Moe,
"Bureaucrats, Legislators, and the Size of Government," American Political Science Review 77
(1983), 297-308.
W. Niskanen,
"Bureaucrats and Politicians," Journal
of Law and Economics 18 (1975), 617-643.
W. Oates, "Searching for
Leviathan: An Empirical Study," AER
75 (1985), 748-758.
W. Oates, "Searching
for Leviathan: A Reply and Further Reflections," AER 79 (1989), 578-83.
T. Persson, G. Roland, and
G. Tabellini, "The Size and Scope of Government: Comparative Politics with
Rational Politicians," European
Economic Review 43 (1999), 699-735.
T. Romer and H. Rosenthal,
"Bureaucrats versus Voters: On the Political Economy of Resource
Allocation by Direct Democracy," QJE
93 (1979), 563-588.
T. Romer and H. Rosenthal,
"Median Voters or Budget Maximizers: Evidence from School Expenditure
Referenda," Economic Inquiry
(1982), 556-578.
A. Shleifer and R. Vishny,
"Corruption," QJE 108
(August 1993), 599-618.
J. Wilson, Bureaucracy:
What Government Agencies Do and Why They Do It (New York: Basic Books,
1989).
J. Zax, "Is There a
Leviathan in Your Neighborhood?," AER,
79(1989), 560-67.
2.3 Fiscal Institutions and Public Choice
B. Abrams and
T. Besley and A. Case,
"Unnatural Experiments? Estimating
the Incidence of Endogenous Policies," Economic
Journal 110(467) (2000), F672-94.
T. Besley and A. Case,
"Does Electoral Accountability Affect Economic Policy Choices? Evidence from Gubernatorial Term
Limits," QJE 110 (August 1995),
769-798.
K. Bradbury, C. Mayer, and
K. Case, "Property Tax Limits and Local Fiscal Behavior: Did Massachusetts
Cities and Towns Spend Too Little on Town Services Under Proposition 2
½?," Federal Reserve Bank of
*D. Cutler, D. Elmendorf, and R. Zeckhauser, "Restraining the
Leviathan: Property Tax Limitation in
T. Downes, R. Dye, and T.
McGuire, "Do Limits Matter? Evidence on the Effects of Tax Limitations on
Student Performance," Journal of
Urban Economics 43 (1998), 401-17.
R. Dye and T. McGuire,
"The Effect of Property Tax Limitation Measures on Local Government Fiscal
Behavior, JPubE 66(3) (December
1997), 469-87.
D. Figlio, "Did the
‘Tax Revolt’ Reduce School Performance?," JPubE 65 (1997), 245-69.
D. Figlio, "Short-term
Effects of a 1990s-ERA Property Tax Limit: Panel Evidence on
D. Holz-Eakin, "The
Line Item Veto and Public Sector Budgets: Evidence from the States," JPubE 36 (1988), 269-292.
*D. Lee,
http://elsa.berkeley.edu/users/dslee/wp/final.pdf
J. Poterba, "State
Responses to Fiscal Crises: The Effects of Budgetary Institutions and
Politics," JPE 102 (August
1994), 799-821.
J. Poterba, "Balanced
Budget Rules and Fiscal Policy: Evidence from the States," NTJ 48 (1995), 329-337.
J. Poterba and K. Rueben,
"The Effect of Property-Tax Limits on Wages and Employment in the Local
Public Sector," AER 85(2) (May
1995), 384-89.
A. Preston and C.
Ichniowski, "A National Perspective on the Effects of the Local Property
Tax Revolt, 1976-1986," NTJ
44(2) (June 1991), 123-45.
J. Vigdor, “Other People’s Taxes:
Nonresident Voters and Statewide Limitation of Local Government,”
forthcoming, Journal of Law and Economics.
http://trinity.aas.duke.edu/~jvigdor/mvnrtlfinal.pdf
J. von Hagen, "A Note
on the Empirical Effectiveness of Formal Fiscal Restraints," JPubE 44 (March 1991), 199-210.
J. von Hagen and I. Harden,
"Budget Processes and Commitment to Fiscal Discipline," European Economic Review (1995), 771-9.
2.4 Endogenous Borders
*Alesina and
Spoalore, “On
the Size and Number of Nations”, Quarterly Journal of Economics, 1997.
*Alesina,
Baqir, and Hoxby, “Political
Jurisdictions in Heterogenous Communities”, Quarterly Journal of Economics,
2003.
D. Brasington, “Joint
Provision of Public Goods: The Consolidation of School Districts”, Journal
of Public Economics, 1999.
3. Public Finance with Competing Jurisdictions
3.1 Jurisdictional Competition: Theory and Evidence
*A. Alesina, C. Hoxby, and R. Baqir, “Political Jurisdictions in
Heterogeneous Communities,” JPE 112
(April 2004), 348-96.
T. Besley and A. Case,
"Vote-seeking, Tax-setting, and Yardstick Competition," AER 85 (1995), 25-45.
J. Brueckner, "A
Tiebout Tax-Competition Model," JPubE
77(2) (2000), 285-306.
D. Epple, R. Filimon, and T.
Romer, “Equilibrium among Local Jurisdictions:
Towards an Integrated Treatment of Voting and Residential Choice,” JPubE 24, 281-308.
D. Epple, T. Romer, and H.
Sieg, "The Tiebout Hypothesis and Majority Rule: An Empirical
Analysis," NBER Working Paper 6977 (1999).
D. Epple and H. Sieg,
“Estimating Equilibrium Models of Local Jurisdictions," JPE 107 (August 1999), 645-681.
D. Epple and A. Zelenitz,
"The Implications of Competition Among Jurisdictions: Does Tiebout Need
Politics?," JPE 89 (1981),
1197-1217.
*Farnham, M. and P. Sevak, “State Fiscal Institutions and Empty-Nest
Migration: Are Tiebout Voters Hobbled?”,
Journal
of Public Economics 90(3), 2006, 407-427.
D. Figlio V. Kolpin, and W.
Reid, "Do States Play Welfare Games," Journal of Urban Economics 46(3) (1999), 437-54.
T. Goodspeed, "Local
Income Taxation: An Externality, Pigouvian Solution, and Public Policies,"
Regional Science and Urban Economics
26 (1995), 279-296.
B. Hamilton, "Zoning
and Property Taxation in a System of Local Governments," Urban Studies 12(2) (1975): 205-11.
*C. Hoxby, "Does Competition Between Public Schools Benefit
Students and Taxpayers?," AER
90(5) (2000), 1209-38.
W. Hoyt, "Competitive
Jurisdictions, Congestion, and the Henry George Theorem," Regional Science and Urban Economics
21(3) (1991), 351-70.
R. Inman and D. Rubinfeld,
"The Political Economy of Federalism," in D. Mueller, ed., Perspective
on Public Choice: A Handbook (New York: Cambridge University Press, 1997),
73-105.
D. Kenyon, "Theories of
Interjurisdictional Competition, "
K. Kollman, J. Miller, and
G. Kramer, "Political Institutions and Sorting in a Tiebout Model," AER 87 (1997), 977-92.
H. Konishi, "Voting
with Ballot and Feet: Existence of Equilibrium in a Local Public Good
Economy," Journal of Economic Theory
68 (1996), 480-509.
T. Nechyba, "Existence
of Equilibrium and Stratification in Local and Hierarchical Tiebout Economies
with Property Taxes and Voting," Economic
Theory 10(1997), 277-304.
T. Nechyba, "Local
Property and State Income Taxes: The Role of Interjurisdictional Competition
and Collusion," JPE 105(2)
(April 1997), 351-84.
W. Oates and R. Schwab,
"Economic Competition Among Jurisdictions: Efficiency Enhancing or
Distortion Inducing?," JPubE
35(3) (1988), 333-54.
S. Ross and J. Yinger,
"Sorting and Voting: A Review of the Literature on Urban Public
Finance," in P. Chesire and E. Mills, eds., Handbook of Regional and Urban
Economics Volume 3 (New York: Elsevier Science, 1999).
*D. Rubinfeld, "Economics of the Local Public Sector," in A.
Auerbach and M. Feldstein, eds., Handbook of Public Economics: Volume II
(Amsterdam: North Holland, 1988), 571-645.
*S. Scotchmer, “Local Public Goods and Clubs”, in A. Auerbach
and M. Feldstein, eds., Handbook of Public Economics, Volume 4,
1997-2042.
http://socrates.berkeley.edu/~scotch/survey.pdf
J. Stiglitz, "The
Theory of Local Public Goods," in M. Feldstein and R. Inman, eds., The
Economics of Public Services (London: MacMillan, 1977), 274-333.
C. Strumpf, "A
Historical Test of the Tiebout Hypothesis: Local Heterogeneity from 1850 to
1990," NBER Working Paper 7946 (October 2000).
C. Tiebout, "A Pure
Theory of Local Expenditures," JPE
(1956), 416-424.
M. Rauscher,
"Interjurisdictional Competition and the Efficiency of the Public Sector:
The Triumph of the Market Over the State?," Centre for Economic Policy
Research Discussion Paper #1624, April 1997.
3.2 Intergovernmental Grants, Mandates, and Subsidies
M. Addonizio,
"Intergovernmental Grants and the Demand for Local Education
Expenditures," Public Finance
Quarterly 19(2) (April 1991), 209-32.
K. Baicker, "Government
Decision-making and the Incidence of Federal Mandates," JPubE 82 (2001):147-94.
*K. Baicker and D. Staiger, “Fiscal Shenanigans, Targeted Federal
Health Care Funds, and Patient Mortality,” NBER Working Paper 10440, April
2004.
http://www.nber.org/papers/w10440.pdf
H. Chernick, "Fiscal
Effects of Block Grants for the Needy: An Interpretation of the Evidence,"
International Tax and Public Finance
5 (1998), 205-33.
*J. B. Cullen, “The impact of fiscal incentives on student disability
rates.” 2003. Journal of Public Economics 87(7-8):1557-89.
D. Feenberg and J. Skinner,
"Federal Medicare Transfers Across States: Winners and Losers," NTJ 53(3) (September 2000), 713-32.
M. Feldstein and G. Metcalf,
"The Effect of Federal Tax Deductibility on State and Local Taxes and
Spending," JPE 95(4) (1987),
710-36.
R. Moffitt, "The
Econometrics of Piecewise-Linear Budget Constraints," Journal of Business and Economic Statistics 5(2) (1986), 243-8.
T. Romer, H. Rosenthal, and
V. Munley, "Economic Incentives and Political Institutions: Spending and
Voting in School Budget Referenda," JPubE
49 (1992), 1-34.
3.3 Property Tax Finance
J. Brueckner, "A Test
for Allocative Efficiency in the Local Public Sector," JPubE 19 (December 1982), 311-331.
D. Figlio, "What’s in a
Grade? School Report Cards and House Prices," NBER Working Paper 8019
(November 2000).
B. Hamilton,
"Capitalization of Interjurisdictional Differences in Local Tax
Prices," AER 66 (1976), 743-753.
P. Mieszkowski, "The
Property Tax: An Excise Tax or a Profits Tax?," JPubE 1 (1972), 73-96.
P. Mieszkowski and G. Zodrow,
"Taxation and the Tiebout Model," JEL
27 (1989), 1098-1146.
W. Oates, "The Effects
of Property Taxes and Local Public Spending on Property Values: An Empirical
Study of Tax Capitalization and the Tiebout Hypothesis," JPE 77(6) (1969), 957-71.
O. Palmon and B. Smith,
"New Evidence on Property Tax Capitalization," JPE 106(5) (October 1998), 1099-1111.
K. Rosen, "The Impact
of Proposition 13 on House Prices in
J. Yinger,
"Capitalization and the Theory of Local Public Finance," JPE 90 (October 1982), 917-43.
J. Yinger et al.,
"Property Taxes and House Values: The Theory and Estimation of
Intrajurisdictional Property Tax Capitalization," in Studies in Urban
Economics (San Diego: Harcourt Brace Jovanich Academic Press, 1988)
4. Public Expenditure Programs
4.1 Cost-Benefit Analysis
P. Diamond and J. Hausman,
"Contingent Valuation: Is Some Number Better than No Number?," JEP 8 (Fall 1994), 45-64.
M. Feldstein, "The
Inadequacy of Weighted Discount Rates," in R. Layard, Cost Benefit
Analysis (Harmondsworth: Penguin, 1974), 311-332.
J. Graham and J. Vaupel,
"Value of a Life: What Difference Does it Make?," Risk Analysis 1 (1981), 89-95.
W. Hanemann,
"Willingness to Pay and Willingness to Accept: How Much Can They
Differ?," AER 81 (June 1991),
635-647.
W. Hanemann, "Valuing
the Environment through Contingent Valuation," JEP 8 (Fall 1994), 19-44.
R. Lind, "A Primer on
the Major Issues Relating to the Discount Rate for Evaluating National Energy
Options," in R.C. Lind, ed., Discounting for Time and Risk in Energy
Policy (Washington: Resources for the Future, 1982), 21-114.
R. Mitchell and R. Carson, Using
Surveys to Value Public Goods: The Contingent Valuation Method (Washington:
Resources for the Future, 1989).
W. Oates, "Estimating
the Demand for Public Goods: The Collective Choice and Contingent Valuation
Approaches," in D. Bjornstad and J. Kahn, eds., The Contingent
Valuation of Environmental Resources: Methodological Issues and Research Needs
(Cheltenham, UK: Elgar,1996).
R. Pindyck,
"Irreversibility, Uncertainty, and Investment," JEL 29 (September 1991), 1110-1148.
P. Portney, "The
Contingent Valuation Debate: Why Economists Should Care," JEP 8 (Fall 1994), 3-18.
4.2 Defense and Infrastructure Spending
D. Aschauer, "Is Public
Expenditure Productive?," Journal of
Monetary Economics 23 (1989), 177-200.
J. Fernald, "Roads to
prosperity? Assessing the Link Between
Public Capital and Productivity," AER
89(3) (1999), 619-38.
J. Laffont, "Toward a
Normative Theory of Incentive Contracts Between Government and Private
Firms," Economic Journal 97
(1987 Supp.), 17-32.
W. Rogerson, "Profit
Regulation of Defense Contractors and Prizes for Innovation," JPE 97 (1989), 1284-1305.
4.3 Public Involvement in Primary and Secondary Education
D. Acemoglu and J. Angrist,
"How Large are Human Capital Externalities? Evidence from Compulsory
Schooling Laws," MIT Department of Economics Working Paper (October 1999).
J. Angrist,
J. Angrist and A. Krueger,
"
J. Angrist and V. Lavy,
"Using Maimonides' Rule to Estimate the Effect of Class Size on Scholastic
Achievement," QJE 114(2) (1999),
533-75.
R. Benabou, "Education,
Poverty, and Growth: The Local Connection," Economic and Financial Review 1(4) (1994), 247-48.
R. Benabou, "Tax and
Education Policy in a Heterogeneous Agent Economy," NBER Working Paper
7132 (May 1999).
E. Bettinger, "The
Effect of
J. Betts, "
J. Betts and J. Grogger,
"The Impact of Grading Standards on Student Achievement, Educational
Attainment, and Entry-level Earnings," NBER Working Paper 7875 (September
2000).
R. Boadway, N. Marceau, and
M. Marchand, "Issues in Decentralizing the Provision of Education," International Tax and Public Finance
3(3) (1996), 311-27.
G. Burtless, ed., Does
Money Matter? The Effect of School Resources on Student Achievement and Adult
Success (Washington, D.C.: Brookings Institution, 1996).
D.
Card and A. Krueger, "
D. Card and A. Krueger,
"School Resources and Student Outcomes: An Overview of the Literature and
New Evidence form North and
E. Cohn, ed., Market
Approaches to Education: Vouchers and School Choice (New York: Elsevier,
1997).
P. Courant,
J. Cullen,
T. Downes, "Evaluating
the Impact of School Finance Reform on the Provision of Public Education: The
T. Downes and D. Schoeman, "School
Finance Reform and Private School Enrollment: Evidence from
D. Epple and R. Romano,
"Competition Between Private and Public Schools, Vouchers, and Peer-Group
Effects," AER 88(1) (March
1998), 33-62.
W. Evans,
M. Feldstein, "Wealth
Neutrality and Local Public Choice in Education," AER 65 (March 1975), 75-89.
*R. Fernandez and R. Rogerson, "Equity and Resources: An Analysis of Education Finance
Systems," JPE 111(4) (2003),
858-97.
http://ideas.repec.org/a/ucp/jpolec/v111y2003i4p858-897.html
R. Fernandez and R.
Rogerson, "Income Distribution, Communities, and the Quality of Public
Education," QJE 111 (1996),
135-64.
R. Fernandez and R.
Rogerson, "On the Political Economy of Education Subsidies," REStud 62 (1995), 249-262.
R. Fernandez and R.
Rogerson, "Public Education and Income Distribution: A Dynamic
Quantitative Evaluation of School-Finance Reform," AER 88(4) (1998), 813-33.
W. Fischel, "Did
Serrano Cause Proposition 13?," NTJ
42 (December 1989), 465-473.
M. Friedman, Capitalism
and Freedom (Chicago: University of Chicago Press, 1982), Chapter 6.
*E. Hanushek, "The Economics of Schooling: Production and
Efficiency in Public Schools," JEL
24 (1986), 1141-77.
E. Hanushek, "Measuring
Investment in Education," JEP 10
(Fall 1996), 9-30.
E. Hanushek,
"Expenditures, Efficiency, and Equity in Education: The Federal
Government's Role," AER 79 (May
1989), 46-51.
E. Hanushek and S. Rivkin,
"Understanding the 20th Century Growth in
C. Hoxby, "Would School
Choice Change the Teaching Profession," NBER Working Paper 7866 (August
2000).
C. Hoxby, "The Effects
of Class Size on Student Achievement: New Evidence from Population
Variation," QJE 115(4) (2000),
1239-85.
C. Hoxby, "Are
Efficiency and Equity Substitutes or Complements?," JEP 10 (Fall 1996), 51-72.
*C. Hoxby, "
http://www.jstor.org/stable/2696457
*B. Jacob, “Accountability, Incentives, and Behavior: The Impact of High-Stakes Testing in the
Chicago Public Schools,” forthcoming JPubE
(2004).
http://ksghome.harvard.edu/~bjacob/highstakes16.pdf
H. Ladd and
H. Ladd and E. Fiske,
"The Uneven Playing Field of School Choice: Evidence from
H. Ladd, ed., Holding
Schools Accountable: Performance-based Reform in Education (Washington,
D.C.: Brookings Institution, 1996).
S. Loeb,
"Estimating the Effects of School Finance Reform: A Framework for a
Federalist System," JPubE 80
(2001), 225-47.
S. Loeb and J. Bound,
"The Effect of
E. Moretti, "Estimating
the Social Return to Education: Evidence from Repeated Cross-Sectional and
Longitudinal Data,"
S.
R. Murnane et al., Who
Will Teach? Policies That Matter (Harvard University Press, 1992).
T. Nechyba, "Mobility,
Targeting, and Private School Vouchers," AER 90(1) (2000), 130-46 (earlier version NBER WP 7239 July 1999).
T. Nechyba, "Public
School Finance in a General Equilibrium Tiebout World," NBER Working Paper
5642.
J. Poterba, "Government
Interventions in the Markets for Education and Health Care: Why and How,"
in V. Fuchs, ed., Individual and Social Responsibility (Chicago:
University of Chicago Press, 1995), 277-304.
J. Poterba, "Demographic
Structure and the Political Economy of Public Education," Journal of Policy Analysis and Management
16 (January 1997), 48-66.
C. Rouse, "Private
School Vouchers and Student Achievement: An Evaluation of the
R. Somanathan, "School
Heterogeneity, Human Capital Accumulation, and Standards," JPubE 67(3) (1998), 369-97.
J. Sonstelie, "The
Welfare Cost of Free Public Schools," JPE
90 (August 1982), 794-808.
B. Wolfe and
4.4 Public Involvement in Higher Education
A. Dick and A. Edlin,
"The Implicit Taxes from College Financial Aid," JPubE 65(3) (1997),
295-322.
*S. Dynarski, “The Behavioral and Distributional Implications of Aid
for College,” AER 92(2) (May 2002),
279-285.
*S. Dynarski, "Hope for Whom? Financial Aid for the Middle Class
and Its Impact on College Attendance," NTJ
53(3) (2000), 629-61.
A. Edlin, "Is College
Aid Equitable and Efficient," JEP
7 (Spring 1993), 143-158.
M. Feldstein, "College
Scholarship Rules and Private Saving," AER
85 (June 1995), 552-566.
P. Ganderton, "The
Effect of Subsidies in Kind on the Choice of a College," JPubE 48 (August 1992), 269-292.
R. Garratt and J. Marshall,
"Public Finance of Private Goods: The Case of College Education," JPE 102 (June 1994), 566-582.
T. Kane, "Saving
Incentives for Higher Education," NTJ
51(3) (1998), 609-20.
T. Kane, "
T. Kane and C. Rouse,
"Labor Market Returns to Two and Four Year College," AER 85(3) (1995), 600-614.
M. McPherson and M. Shapiro,
"
*S. Peltzman, "The Effect of Government Subsidies-in-Kind on
Private Expenditures: The Case of Higher Education," JPE 81 (1973), 1-27.