Premium
SALIENCE AND THE GOVERNMENT PROVISION OF PUBLIC GOODS
Author(s) -
Wibbenmeyer Matthew,
Anderson Sarah E.,
Plantinga Andrew J.
Publication year - 2019
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/ecin.12781
Subject(s) - salient , salience (neuroscience) , public good , economics , public economics , government (linguistics) , natural resource economics , microeconomics , political science , psychology , law , linguistics , philosophy , cognitive psychology
This paper examines how behavioral biases caused by salient events affect the government provision of public goods. We develop a theory in which competing communities lobby the government for allocations of a local public good. Salient events bias community demands for the good, which results in inefficient allocations. We empirically test this theory using salient wildfires and government projects to reduce wildfire risk. Wildfires reduce risk to nearby communities, but may increase demand for fuels management projects because of biases induced by salient wildfires. We find that communities experiencing recent nearby fires are more likely to receive fuels management projects. ( JEL D03, H41, Q24)