Public Budget Choices and Private Willingness to Pay

22 Pages Posted: 7 Jun 2010

Abstract

Efficient allocation of public funds depends upon good information about citizens' values. The purpose of this paper is to demonstrate how citizens' values can be obtained by eliciting marginal willingness to tradeoff (MWTTO) ratios for public spending categories and linking these ratios to individual, private willingness to pay. The link enables estimation of the willingness to pay for an expansion to any of the budget categories based on the elicited willingness to pay and the marginal willingness to tradeoff ratios. Tradeoff ratios and willingness to pay are estimated for public budget categories in Kentucky based on a representative sample surveyed by mail and the web in 2007. Estimates show that individuals are willing to pay the most for an expansion to educational services, followed by health care.

Suggested Citation

Koford, Brandon C., Public Budget Choices and Private Willingness to Pay. Public Budgeting & Finance, Vol. 30, Issue 2, pp. 47-68, Summer 2010, Available at SSRN: https://ssrn.com/abstract=1620651 or http://dx.doi.org/10.1111/j.1540-5850.2010.00956.x

Brandon C. Koford (Contact Author)

Weber State University ( email )

3807 University Circle
Ogden, UT 84408
United States

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