Working Paper: NBER ID: w9842
Authors: Louis Kaplow
Abstract: This article addresses conceptual issues concerning the distributive incidence of public goods. Solutions depend on the specific purposes for asking the question of distributive incidence notably, assessing the extent to which various public goods should be provided, determining how the provision of public goods affects the desirability of income redistribution, and providing a meaningful description of the distribution of well-being. In the course of the analysis, a simple and intuitive version of the benefit principle of taxation (qualitatively different from those commonly advanced in pertinent literatures) is presented, and some of the problems confronting empirical attempts to measure the distributive incidence of public goods are resolved.
Keywords: No keywords provided
JEL Codes: D31; H21; H23; H43
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Provision of public goods (H42) | Distribution of income (D31) |
| Provision of public goods (H42) | Marginal social welfare gain from income redistribution (D69) |
| Benefit-absorbing tax adjustment (H20) | Neutralizes distributional effects of public good provision (H49) |
| Provision of public goods and tax adjustments (H49) | Pareto improvement (D61) |
| Public goods impact individual utility and labor supply decisions (H49) | Relationship between public goods and income redistribution (H49) |