Government Budgets and Public Services: Some Criteria for Determining the Sources and Levels of Public Goods, including Transport Services

Abstract

AbstractInstances of non‐optimal consumption of public goods and services can easily arise if individual demand curves are not identical. It does not follow, however, that the best solution to the problem of too little consumption is an increase in government expenditure. Special user charges and voluntary contributions of time, goods, and money on the part of persons that value public goods more highly than the general population have long been important ways of supplementing government spending for social goods. The work trip appears to be a good example of a service area where existing cost structures and pricing methods may be biased against the voluntary associations which are needed to make the United States less dependent on foreign oil. This bias could be corrected by using an income‐tax‐surcharge to help finance the fixed costs associated with mass transit and other types of work trip pooling arrangements.