Conference Agenda
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Daily Overview |
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Public goods provision and equity Location: Auditorium B: Frøystein Gjesdal Session Chair: Benjamin Ouvrard, GAEL, INRAE | |
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Self-reliance and the provision of a tax financed public good. An experimental approach 1: University of Hamburg, Germany; 2: University of Lund, Sweden Paying higher taxes that finance public goods might be less lucrative if high-quality private alternatives are available. Inspired by the trend that an increasing amount of traditional public goods such as disaster protection, education, or security, become privatized, this paper investigates the willingness to finance inclusive public goods when exclusive alternatives become accessible for part of the group. In a private-public goods game, participants vote for a tax rate with which they intend to finance the inclusive public good, and subsequently choose if they want to acquire the exclusive private substitute. In a between-subject design, we vary i) the price of the private alternative, and ii) whether participants play in heterogeneous or homogeneous groups. As theoretically predicted, we find that as the cost of being self-reliant (private good) decreases, the average tax rate selected by groups falls. Surprisingly, we find a substantial share of rich players voting for high tax rates despite opting the private good. This partly leads to inequality increasing less in heterogeneous groups when decreasing the costs of the private alternative. | |