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PREFERENCES FOR STATE TAX AND SPENDING POLICIES: EVIDENCE FROM SURVEY DATA ON THE ROLE OF INCOME
Author(s) -
Temple Judy A.,
PorterHudak Susan
Publication year - 1995
Publication title -
economics and politics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.822
H-Index - 45
eISSN - 1468-0343
pISSN - 0954-1985
DOI - 10.1111/j.1468-0343.1995.tb00103.x
Subject(s) - economics , categorical variable , survey data collection , public economics , adjusted gross income , demographic economics , income tax , variable (mathematics) , income distribution , state (computer science) , state income tax , gross income , econometrics , inequality , tax reform , mathematical analysis , statistics , algorithm , machine learning , computer science , mathematics
Employing a commonly‐used method of creating a continuous income variable from categorical data, we obtain results from a fiscal survey that reveal a strong nonmonotonic effect of income on the willingness to pay additional taxes for state expenditures on education and public aid. The existence of income‐demand schedules that are U‐ or inverted U‐shaped casts doubt on the appropriateness of assuming that the median income voter is decisive. After investigating the sensitivity of our results to different income measures, we suggest that fiscal surveys should be designed to provide sufficiently detailed information about respondents’incomes, especially for high‐income respondents.