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MEASURING THE BENEFITS FROM PUBLIC SERVICES: THE EFFECTS OF LOCAL GOVERNMENT SPENDING ON THE DISTRIBUTION OF INCOME IN NORWAY
Author(s) -
Aaberge Rolf,
Langørgen Audun
Publication year - 2006
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.2006.00176.x
Subject(s) - distribution (mathematics) , economics , public economics , local government , income distribution , inequality , cash , public sector , household income , value (mathematics) , economic inequality , business , finance , geography , economy , archaeology , machine learning , computer science , mathematical analysis , mathematics
The purpose of this paper is to provide an evaluation of how local public in‐kind benefits affect the distribution of income in Norway. To this end, a method that accounts for differences between municipalities in capacity to produce the same standard of public services is used for assessing the value of sector‐specific local public services in each municipality. Moreover, recipient frequencies in various demographic groups are used as basis for determining the allocation of the assessed value of services on citizens of the municipalities. The empirical results show that inequality in the (marginal) distribution of municipal in‐kind benefits is rather high. The contribution of municipal in‐kind benefits to inequality in the distribution of extended income (cash (after‐tax) income plus municipal in‐kind benefits) proves, however, to be approximately neutral.