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Opting out of publicly provided services: A majority voting result

Author

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  • Gerhard Glomm

    (Michigan State University, Department of Economics, Marshall Hall, E. Lansing, MI 48824, USA)

  • B. Ravikumar

    (Department of Economics, Pappajohn Business Administrative Building, University of Iowa, Iowa City, IA 52242, USA)

Abstract
Our objective in this paper is to examine majority voting in an environment where both public and private alternatives coexist. We construct a model in which households are differentiated by income and have the option of choosing between publicly provided services and private services. Publicly provided services are financed through income tax revenues and made available to all citizens at zero price. Majority voting determines the tax rate. Even though preferences over tax rates are not single peaked, we provide conditions under which a majority voting equilibrium exists. We illustrate our existence result with CES preferences and a Dagum income distribution.

Suggested Citation

  • Gerhard Glomm & B. Ravikumar, 1998. "Opting out of publicly provided services: A majority voting result," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 15(2), pages 187-199.
    • Handle: RePEc:spr:sochwe:v:15:y:1998:i:2:p:187-199
    Note: Received: 21 December 1993 / Accepted: 2 September 1996
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