Private Provision Of Public Goods Research Articles

Private provision of public goods under price uncertainty: a comment

Private provision of public goods under price uncertainty: a comment

Valuation asymmetry in the dynamic private provision of public goods

Valuation asymmetry in the dynamic private provision of public goods

Accelerated green patent examination and innovation benefits: An analysis of private economic value and public environmental benefits

The green patent fast-track (GPFT) system is an improvement of the traditional patent examination system in the field of green innovation. Based on the unique perspective of “private provision of public goods,” this paper constructs a framework for the impact of GPFT on the economic value and environmental benefits of green patents. Based on adopting an improved patent renewal model to calculate the economic value of green invention patents, we use a dataset of 278 Chinese cities from 2006 to 2019 and adopt the intensity differences-in-differences model to test the economic and environmental effects of GPFT. Our results suggest that GPFT increases the private economic value of green patents, which is more significant in resource-based and financially developed cities. Furthermore, GPFT improves the economic gains of corporate green patents, but reduces these of public institutions' green patents. Local protectionism cannot be ruled out. The results of the environmental benefits investigation indicate that GPFT suppresses SO2 and CO2 emissions, and the economic effect of GPFT does not crowd out its public environmental benefits; conversely, it has a positive mediating effect in this relationship. This research provides an important reference for other economies to implement or optimize GPFT to stimulate green innovation.

Contributing with private bundles to public goods

We extend to multiple private commodities the seminal model by Bergstrom et al. (J Public Econ 29:25–49, 1986) on the private provision of public goods. Considering the relative value of the aggregate donations, we define a notion of equilibrium and show its existence. We analyze the effects of resource redistributions on the equilibrium outcome, identifying conditions that guarantee neutrality. We study some further properties of the contribution equilibrium, and provide a strategic market game approach, defining a sequence of non-cooperative games whose equilibria converge to an equilibrium of the economy.

Crowding in with impure altruism: Theory and evidence from volunteerism in national parks

This paper makes three contributions to the literature on private provision of public goods. First, we identify limitations of the frequently used specification test that distinguishes between the standard models of pure and impure altruism based on the extent of crowding out. While the literature takes as given the result that crowding out should be less with impure altruism than with pure altruism, we show that it can be either more or less. Second, we propose a new, more general test based on the presence of crowding in or greater than one-for-one crowding out, both of which are consistent with impure altruism only. Third, we provide empirical evidence. Using a unique panel data set on volunteerism in U.S. National Parks, we estimate the causal effect of changes in a park’s public funding on the amount of within-park volunteerism. The overall finding is that each additional dollar of public expenditure crowds in 27 cents worth of volunteerism on average. We show how the estimates of crowding in, along with heterogeneity based on park and volunteer hour types, are theoretically consistent with the mainstay model of impure altruism.

Kant and Lindahl*

AbstractIn 1896 and 1919, respectively, Wicksell and Lindahl analyzed the public provision of public goods through parliamentary negotiation. Later, Roemer applied Kant's 1785 imperatives to the private provision of public goods by voluntary contributions. Our focal equilibrium notions are the balanced linear cost‐share equilibrium for the Wicksell–Lindahl approach and the multiplicative Kantian equilibrium in the Kant–Roemer modeling. These turn out to be fundamentally equivalent, being defined by the same individual optimization problem. These notions fit well with the idea that technology is publicly owned, but we also extend them to cover private‐ownership economies with exogenously given profit shares. We show that the equivalence between the Wicksell–Lindahl and Kant–Roemer notions carries over to them.

The Ends Against the Middle: The Case of Municipal Golf

The theory and empirical analysis of the public provision of private goods have primarily considered the provision of education and healthcare. In this paper, we extend the application of the theories presented in Epple and Romano (1996a, 1996b) to the provision of a more private good—a golf course. While there may be some public social benefits of recreation including golf, for the most part, golf is a private good. We analyze golf course ownership in Pennsylvania, a state with a diversity of municipalities. Our main findings support the ends-against-the-middle hypothesis in which municipalities with a majority of low-income voters and high-income voters are less likely to own a municipal golf course. Municipalities with a majority of middle-income voters are more likely to own a municipal golf course.

Private provision of public goods: a general equilibrium analysis

Private provision of public goods: a general equilibrium analysis

Private Provision of Public Goods: Subscription Mechanisms in Voluntary Green Electricity Programs

Private Provision of Public Goods: Subscription Mechanisms in Voluntary Green Electricity Programs

Community Diversity and Donor Control: An Empirical Analysis of Contributions to Donor-Advised Funds at Community Foundations

This study examines the relationship between community ethnic-racial diversity and contributions to donor-advised funds (DAFs) held by community foundations. Unlike general contributions, DAFs allow donors to retain advisory control over their fund distribution based on individual preferences. In contrast to prior research that generally finds that diversity dampens private provision of public goods, we show that greater ethnic-racial diversity is significantly associated with higher levels of contributions to DAFs at community foundations but not with general contributions. The findings contribute to the literature on diversity and public goods provision and have practical implications for the policy role of private philanthropy.

Private provision of public goods and political survival: Rail transport in four European democracies in the 20th century

The provision of public goods plays a key role in the survival of leaders in democracies. Assuming that mass rail transport shares many of the characteristics of public goods, we claim that the public provision of railway services is more beneficial for political leaders in democracies than private provision. To estimate the effect of the type of provision of railway services on leader survival, we use new data on four European democracies that present variation in the public and private ownership of rail miles between 1913 and 1981. We find that the private provision of rail transport increases the hazard rates of leader deposition in these democracies. These results bear crucial implications, as they help to explain the sweeping policies of nationalization of public services that took place in the first half of the 20th Century in Western Europe.

Optimal Public Provision of Private Goods

How does a private market influence the optimal design of a public program? In this paper, I study a designer who has preferences over how a public option and a private good are allocated. However, she can design only the public option. Her design affects the distribution of consumers who purchase the private good—and hence equilibrium outcomes. I characterize the optimal mechanism and show how it can be computed explicitly. I derive comparative statics on the value of the public option and show that the optimal mechanism generally rations the public option. Finally, I examine implications on the optimal design when the designer can intervene in the private market or introduce an individual mandate.

Kant and Lindahl

Wicksell (1896) and Lindahl (1919) analyzed the public provision of public goods through parliamentary negotiation. Roemer (2010, 2019) applied Kant’s (1785) categorical imperative to the private provision of public goods by voluntary contributions. They coincide in yielding efficient outcomes. Our focal equilibrium notions are the Multiplicative Kantian Equilibrium in the Kant-Roemer modelling and the Balanced Linear Cost Share Equilibrium for the Wicksell-Lindahl approach. It turns out that both are defined by the same individual optimization problem, and that costs are distributed according to marginal valuation, what we call the Lindahl Ratio. More general versions of the Wicksell-Lindahl and Kant-Roemer models depart from the Lindahl Ratio in ways that can be interpreted in terms of private property rights on the technology.

Conditional cooperation in group contests.

In this paper we show experimentally that conditional cooperation, a phenomenon described in the private provision of public goods, is also present in group contests, where participants' contributions to their group performance partially determines if they overcome a rival group. This environment allows us to identify new determinants of conditional cooperation. We observe conditional cooperation in successful groups and in groups where members contribute more than rivals (even if they lose), but it vanishes in those groups that lose the contest due to low group performance. A random-effect linear panel regression analysis with an extensive set of controls confirms the findings.

Defined benefit pension policies and social responsibility performance: do socially responsible firms walk the talk?

PurposeThis study aims to examine whether socially responsible firms have well-funded employee pension programs and whether corporate social responsibility (CSR) performance is associated with management discretionary choice of pension accounting assumptions.Design/methodology/approachThe current study examines the impact of CSR performance on two measures of pension funding and two pension accounting assumptions using regression analysis. This study uses a panel data of 13,099 firms-years across 1,428 US firms from 1992 to 2015.FindingsFirms with higher CSR scores report higher pension net assets and are less likely to have underfunded pension than their counterparts. These firms also adopt more responsible (conservative) pension accounting assumptions (i.e. lower discount rate and a higher rate of compensation increase) to estimate pension benefit obligations. Results are stronger for firms that operate in the materials and industrial sectors and for the post-2000 period when underfunded pension has become more prevalent. Firms with higher CSR scores are also less likely to have a pension freeze.Originality/valueThis study examines the signaling role of CSR by using the signaling theory to explain how senders view the signaling process as a channel to build their reputation and the correspondent inference theory to explain how receivers process and assess the signal. It provides evidence that the signal provided by CSR score is reliable in assessing firms’ commitment to non-investing stakeholders, such as employees, providing valuable information for potential employees making career decisions and for managers considering employee pension as part of corporate strategies to attract high quality workforce. This study provides inputs for public accountants providing assurance services that CSR performance has a significant impact on management reporting choices. This study also provides evidence that CSR could be considered a private provision of public goods that internalize the negative externality of the prevalent underfunded pension phenomenon.

Moral Suasion and the Private Provision of Public Goods: Evidence from the COVID-19 Pandemic

We study how moral suasion that appeals to two major ethical theories, Consequentialism and Deontology, affects individual intentions to contribute to a public good. We use the COVID-19 pandemic as an exemplary case where there is a large gap between private and social costs and where moral suasion has been widely used as a policy instrument. Based on a survey experiment with a representative sample of around 3500 Germans at the beginning of the pandemic, we study how moral appeals affect contributions with low and high opportunity costs, hand washing and social distancing, to reduce the infection externality as well as the support for governmental regulation. We find that Deontological moral suasion, appealing to individual moral duty, is effective in increasing planned social distancing and hand-washing, while a Consequentialist appeal only increases planned hand-washing. Both appeals increase support for governmental regulation. Exploring heterogeneous treatment effects reveals that younger respondents are more susceptible to Deontological appeals. Our results highlight the potential of moral appeals to induce intended private contributions to a public good or the reduction of externalities, which can help to overcome collective action problems for a range of environmental issues.

Social Status Concerns and the Political Economy of Publicly Provided Private Goods

Abstract We analyse the political economy of the public provision of private goods when individuals care about their social status. Status concerns motivate richer individuals to vote for the public provision of goods they themselves buy in markets: a higher provision level attracts more individuals to the public sector, enhancing the social exclusivity of market purchases. Majority voting may lead to a public provision that only a minority of citizens use. Users in the public sector may enjoy better provision than users in the private system. We characterise the coalitions that can prevail in a political equilibrium.

Social Status Concerns and the Political Economy of Publicly Provided Private Goods

We analyze the political economy of the public provision of private goods when individuals care about their social status. Status concerns motivate richer individuals to vote for the public provision of goods they themselves buy in markets: a higher provision level attracts more individuals to the public sector, enhancing the social exclusivity of market purchases. Majority voting may lead to a public provision that only a minority of citizens use. Users in the public sector may enjoy better provision than users in the private system. We characterize the coalitions that can prevail in a political equilibrium.

A Model of Inequality Aversion and Private Provision of Public Goods

AbstractI develop a model of inequality aversion and public goods that allows the marginal rate of substitution to be variable. As a theoretical foundation, utility function of the standard public goods model is nested in the Fehr-Schmidt model. An individual’s contribution function for a public good is derived by solving the problem of kinky preference and examining both interior and corner solutions. Results show that the derived contribution function is not monotonic with respect to the other individual’s provision. Thus, the model can be used to explain empirical evidence for the effect of social comparison on public-good provision.

The Perils of Private Provision of Public Goods

We study the consequences of a firm engaging in corporate social responsibility within the firm’s operations, rather than doing so outside the firm through charitable donations. After April 2018 protests, Starbucks enacted policies that anybody could sit in their stores and use the bathroom without making a purchase. Using anonymized cellphone location data, we estimate this led to a 7.0% decline in attendance at Starbucks locations relative to other nearby coffee shops. The effect is 84% larger near homeless shelters, and larger for Starbucks’ wealthier customers. Remaining Starbucks customers spent 4.1% less time per visit. Public urination citations decreased near Starbucks locations, but rates of other minor crimes were unchanged. Our results highlight the difficulties of directly providing public goods instead of relying on a division of labor, as customers are crowded out by non-customers.