the performance of pivotal voter models in small scale elections evidence from texas liquor referenda abstract this paper explores the ability of pivotal voter models to explain voter behavior in small scale elections using data from texas liquor referenda the findings provide little support for the view that pivotal voter models are a reasonable theory for understanding small scale elections interestingly this is not because they cannot explain the levels of turnout in the data but rather because they cannot explain the size of the winning margins the logic of pivotal voter models implies that elections must be expected to be close even if there is a significant difference between the sizes of the groups or the intensity of their preferences with even a relatively small number of eligible voters elections that are expected to be close ex ante must end up being close ex post however in the data winning margins are often significant

the demand for education with power equalizing aid abstract state grants in aid modify the full fiscal income and tax price for education services faced by voters in local school districts if aid is non linear in the local property tax rate as occurs with district power equalization coupled with an aid floor then individual budget constraints are non linear and least squares estimation is inappropriate we develop and estimate a model that incorporates these effects derive and extensively illustrate the comparative statics present global and local elasticities and simulate the impact of parameter changes on the variance of spending and the cost of the program

private demands for public capital evidence from school bond referenda abstract this paper develops a framework for estimating demand for school infrastructure investment that is financed through local bond referenda our framework takes explicit account of the irregular and discrete nature of local capital investment and the objective functions of local school boards our empirical model consists of a three equation system composed of a proposed spending equation a vote equation and a selection equation estimated income and price elasticities of demand for school infrastructure are similar to those found in studies of current school spending we also find that school boards act like risk averse budget maximizing agenda setters

micro estimates of public spending demand functions and tests of the tiebout and median voter hypotheses responses to questions given to a random sample of michigan households are used to estimate public spending demand functions while income and price elasticities are similar to those obtained from aggregate data positive income elasticities appear to arise because public services are distributed in a prorich manner a relatively small variance in spending demands among urban and suburban communities in metropolitan areas with substantial public service variety suggests that the tiebout mechanism works this interpretation is supported by the fact that actual spending conforms substantially to desired levels in urban areas but less so in rural areas with little public sector choice

optimal taxation and fiscal constitution abstract assuming a world with excessive taxes the focuses of this paper are political mechanisms that ensure efficiency enhancing restraints on taxes in particular it is shown that supermajority requirements to approve tax increases as currently used in some us states is the means of attaining this objective their relationship to another such mechanism prevalent in earlier centuries that of franchise restrictions is discussed

the effect of the expansion of the voting franchise on the size of government this paper examines the claim that expansion of the voting franchise has been an important factor in the growth of government state government spending and state and local spending are explained using a panel of 46 states for 1950 88 elimination of poll taxes and literacy tests led to higher turnout particularly among the poor and a poorer pivotal voter as predicted we find that these changes a fall in the income of voters relative to state income and the ouster of republicans from state government led to a sharp rise in welfare spending but no change in other spending

is the median voter decisive evidence from referenda voting patterns abstract this paper examines whether the voter with the median income is decisive in local spending decisions previous tests have relied on cross sectional data while we make use of a pair of california referenda to estimate a first difference specification the referenda proposed to lower the required vote share for passing local educational bonding initiatives from 67 to 50 and 67 to 55 respectively we find that voters rationally consider future public service decisions when deciding how to vote on voting rules however the empirical evidence strongly suggests that an income percentile below the median is decisive for majority voting rules especially in communities that have a large share of high income voters with attributes that suggest low demand for public services based on a model that explicitly recognizes that each community contains voters with both high and low demand for public school spending we also find that an increase in the share of low demand voters is associated with a lower decisive voter income percentile for the high demand group this two type model implies that our low demand types individuals over age 45 with no children have demands that are 45 lower than other voters collectively these findings are consistent with high income voters with weak preferences for public educational services voting with the poor against increases in public spending on education

interjurisdictional sorting and majority rule an empirical analysis the goal of this paper is to provide a comprehensive empirical analysis of majority rule and tiebout sorting within a system of local jurisdictions the idea behind the estimation procedure is to investigate whether observed levels of public expenditures satisfy necessary conditions implied by majority rule in a general equilibrium model of residential choice the estimator controls for observed and unobserved heterogeneity among households observed and unobserved characteristics of communities and the potential endogeneity of prices and expenditures as well as the self selection of households into communities of their choice we estimate the structural parameters of the model using data from the boston metropolitan area the empirical findings reject myopic voting models more sophisticated voting models based on utility taking provide a potential explanation of the main empirical regularities

does school choice lead to sorting evidence from tiebout variation a question commonly raised about school choice is whether it would result in sorting or stratification previous research has asked this with respect to inter district or tiebout choice but has generated no consensus in part because areas district concentrations may be endogenous this paper addresses this by exploiting the fact that some metropolitan areas mas have different numbers of districts operating at the primary and the secondary level the resulting within ma between educational level variation in district concentration suggests that increases in district availability do affect children s district and school level peer groups and that they lower private enrollment jel h1 h7 i2

a dynamic simulation of low carbon policy influences on endogenous electricity demand in an isolated island system abstract this paper considers the dynamics of electricity demand in response to changes arising from low carbon policies and socio economic developments as part of an investigation into the evolution of such systems on small economically developed islands endogenous electricity demand and associated policies are studied for the azorean island of sao miguel a comprehensive system dynamics sd model covering the period 2005 2050 is presented which captures both historical behaviours and real world influences on the endogenous demand dynamics of an island based electricity system the impact of tourism energy efficiency and electric vehicles ev expansion allied with associated policy options are critically evaluated by the sd model using a series of scenarios the model shows that energy efficiency measures exhibit the most significant long term impact on electricity demand while in contrast policies to increase tourism have a much less direct impact and ev expansion has thought provoking impacts on the long term demand although this is not as influential as energy efficiency measures

dynamic models of portfolio behavior more on pitfalls in financial model building in an important article in this review william brainard and james tobin have emphasized the role played by the wealth constraint in systems of asset demand equations the wealth constraint gives rise to consistency conditions which must be satisfied by the demand functions when such a system is specified and estimated as brainard and tobin caution care must be taken to ensure that unrealistic coefficients are not inadvertently imposed on omitted equations by failure to recognize the consistency conditions noting that the wealth constraint applies out of as well as in portfolio equilibrium brainard and tobin focus attention on systems in which actual and desired stocks of assets differ they specify a multivariate stock adjustment model wherein the desired change in holdings of any asset depends in general upon all asset stock disequilibria the existence of such stock disequilibria can be implicitly rationalized on the basis of costs of adjustment which impinge on the rate of change of at least some assets in this framework they show that the stock adjustment coefficients must also satisfy certain consistency conditions to ensure that the wealth constraint is satisfied an important feature of their analysis is that the total change in wealth savings plus capital gains is treated as exogenous to the financial sector and the asset flow demands described above are conditional upon the exogenously given change in wealth this strategy of separating the portfolio balance decision from the consumption saving decision is one that tobin has explicitly used and justified in his 1969 article especially pp 15 16 and is one that has been widely and effectively used in modern macroeconometric models the central argument of the present paper is that this separation of flow allocation and stock allocation decisions is not legitimate in the presence of adjustment costs attached to changing the level of individual asset holdings the existence of adjustment costs means that there is no portfolio balance problem per se in the sense of allocation of a given level of wealth but rather a longer run problem of determining an optimal time path for each asset and for the level of consumption thus a natural extension of the brainard tobin model is to treat saving and portfolio decisions in an integrated fashion 2 note that the brainard tobin model is perfectly consistent with any model of savings behavior and hence no logical con queen s university and cowles foundation for research in economics yale university i am grateful to adrian pagan gordon sparks and james tobin for helpful discussions and especially to gary smith who as well as patiently discussing many of the issues provided detailed comments on earlier drafts of this paper this research was partially supported by a national science foundation grant to the cowles foundation and by a canada council grant to the author remaining mistakes and opinions are my own i this also has implications for the common practice in macro economic models of leaving the bond market as implicit care must be taken to ensure that silly behavior is not inadvertently attributed to bondholders william silber tobin and alan blinder and robert solow have initiated research which reintroduces the bond market into macroeconomic models 21t appears to be a fairly general result that the existence of adjustment costs leads to integrated behavior m ishaq nadiri and sherwin rosen have established a similar result for the theory of the firm and robin mukherjee and edward zabel have recently shown that the separation theorem prominent in the finance literature on the mean variance approach to optimal consumption portfolio behavior fails to hold when transactions costs are introduced in my 1975 paper appendix i have argued that the integration of saving and portfolio balance decisions also applies in continuous time models even though such models are characterized by separate stock and flow budget constraints

local public expenditure in sweden a model where the median voter is not necessarily decisive abstract this paper deals with local public expenditures and the analysis is based on cross section data for the swedish municipalities two models are estimated one is the basic median voter model where the decisive voter is assumed to be the voter with median income while the other is a more general statistical alternative the statistical alternative nests the basic median voter model as a special case which makes it easy to test the null hypothesis that the basic median voter model is the correct model given that the alternative is the true general structure although our results indicate a rejection of the null hypothesis the estimation results are nevertheless similar for the two models

the median voter model across levels of government the median voter model provides a method of aggregating individual voter s demands to obtain community demand although higher level governments are often assumed to be less responsive to voters than lower level governments it remains an open question whether or not the median voter model which has been found to apply to the lowest tier of the federalist system extends to higher level governments we use the cox specification test to find that the ad hoc model dominates the median model for counties and states the county results are sensitive to the time periods budgetary structure and degree of urbanization

a group rule utilitarian approach to voter turnout theory and evidence this paper explores a group rule utilitarian approach to understanding voter turnout inspired by the theoretical work of john c harsanyi 1980 and timothy j feddersen and alvaro sandroni 2002 it develops a model based on this approach and studies its performance in explaining turnout in texas liquor referenda the results are encouraging the comparative static predictions of the model are broadly consistent with the data and a structurally estimated version of the model yields reasonable coefficient estimates and fits the data well the structurally estimated model also outperforms a simple expressive voting model

ends against the middle determining public service provision when there are private alternatives abstract public provision of a service coexists with private market provision the quality of public provision is determined by majority vote preferences are not single peaked owing to the presence of private alternatives we identify two cases in one majority voting equilibrium always exists and the median income voter is pivotal in the other a necessary condition for equilibrium indentifies the pivotal voter who must have income below the median when equilibrium exists a coalition of middle income households who consume the public alternative will be opposed by a coalition of rich and poor households with the rich choosing private consumption

the distribution of public services an exploration of local governmental preferences a local governmental welfare function is specified to explore two of its central characteristics the equity productivity trade off and differential weights across neighborhoods the constrained maximization model is estimated using service outcomes safety in the welfare function as opposed to publicly provided inputs police over neighborhoods the equity productivity trade off is found to be considerable and not all neighborhoods are weighted equally the results show that inequality aversion and unequal concern by local government over service outcomes must be addressed explicitly to understand the observed distribution of publicly provided inputs with important implications for standard analysis of local governmental behavior copyright 1987 by american economic association

tiebout bias on the demand for local public goods abstract empirical work estimating the demand for local public goods has been based upon the median voter model it has generally proceeded with little consideration given to the possibility of tiebout type migration emphasized in the property value literature in this paper we raise the question of how valid the typical cross section demand estimation procedures are when possible tiebout like migration among jurisdictions is taken into account we find that such procedures are not in fact consistent with a model in which people vote with their feet as well as with ballots we also show that if a full tiebout equilibrium has been achieved in a set of communities there is a simple and obvious way to estimate demands for local public goods which is different from the median voter approach this technique has not to our knowledge been used in existing studies and moreover has some practical as well as theoretical advantages if the workings of the tiebout process are not taken into account more is involved than just impracticality we show that the estimated effects of personal characteristics will generally be biased and that that direction of the bias can usually be determined

the median voter model in public choice theory the changing perception by public choice theorists about the relevance of the median voter model is a result of excessive extrapolation of the conclusions of theoretical models to the real world early in the 1970s the median voter model was often accepted as implying that the output produced in the public sector was what was most preferred by the median voter this claim is excessive because the median voter model is only a model of demand aggregation under majority rule and has little to say about the supply side of the public sector in the late 1970s many scholars identified several circumstances under which the model would not apply in theory but these critiques of the model were often viewed as reasons to abandon the median voter model altogether the model went from having excessive claims that made the model appear to be more powerful than it really is to excessive claims that made the model appear to be less powerful than it really is these latter claims were often in response to the earlier claims rather than to the model appropriately applied

beyond the median voter preferences district heterogeneity and political representation despite the centrality of the median voter prediction in political economy models overwhelming empirical evidence shows that legislators regularly take positions that diverge significantly from the preferences of the median voter in their districts however all these empirical studies to date lack the necessary data to directly measure the preferences of the median voter we utilize a unique data set consisting of individual level voting data that allows us to construct direct measures of voter preferences we find that legislators are most constrained by the preferences of the median voter in homogeneous districts

political markets property tax referenda and local school spending for better or worse fiscal decisions made through property tax referenda allow local political markets to work demand supply and voting process components of such markets are estimated for those oregon k 12 school districts that held referenda between 1981 and 1986 various attributes of the median voter were related to school spending but supply decisions by school boards and administrators were also important large districts used state aid to substitute for local property tax revenues on nearly a one for one basis while relying on reversion budgets inadequate property tax bases and implicit threats of school closures to extract greater than desired spending levels from the median voter

disentangling the demand function from the production function for local public services the case of public safety abstract in this paper we develop a theoretical framework and an econometric model which allow us to separate the effect of income and other socioeconomic variables on the demand for publicly provided goods from their effect on the price of those goods we apply our approach in a study of expenditures for police protection in a cross section of 73 u s cities and counties our results suggest that studies of public expenditures which fail to incorporate community characteristics in production and cost functions can yield very misleading results

learning the preferences of governments and voters from proposed spending and aggregated votes abstract remarkably little is known about how to analyze the proposals and voting results from spending referenda when the votes are aggregated by jurisdiction and the proposals are different across jurisdictions this paper presents a framework in which we can derive the voting equation comparative statics and links between reduced form and structural parameters that are implied by different models of the proposal maker it is then possible to use interjurisdictional proposal and voting information to test hypotheses about the proposal maker and the voters our empirical work finds support for a modified budget maximization model over simpler maximization models and various non maximization models

public provision of private goods government may provide a good that can if legally permitted be supplemented by private purchases policy is determined by majority rule under standard assumptions on preferences a majority voting equilibrium exists a regime of positive government provision with no restriction on private supplements is shown to be majority preferred to a regime of either only market provision or only government provision combined public and private expenditure on the good is higher under this dual provision regime than under either of the alternatives under some preference configurations the median income voter is pivotal under others a voter with income below the median is pivotal

tiebout bias and the demand for local public schooling institute of university of ii business and california economic research berkeley center for real estate and urban economics working paper series working paper 86 109 tiebout bias and the demand for local public schooling by daniel l rubinfeld perry shipiro judith roberts these papers are preliminary in nature th urpose 39 to stimulate 39 ussion comment therefore they are not t cited or quoted 39 ny p ation wit express permissio the author graduate school of business administration

the median voter hypothesis evidence from general purpose local governments the median voter hypothesis mvh represents a much used as well as much criticized tool in the hands of public finance economists to evaluate the mvh this paper applies the cox specification test using data from general purpose municipal governments the cox test allows for possible simultaneous rejection of the mvh and all tested models thus providing stricter criteria than applied to date in empirical mvh analyses the test results reveal that the mvh is appropriate for explaining the aggregate behavior of municipal governments but not specific services further the single service and single tax base assumptions are not critical to the empirical mvh performance