Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/204665
Authors: 
Friedrichsen, Jana
König, Tobias
Lausen, Tobias
Year of Publication: 
2019
Series/Report no.: 
DIW Discussion Papers 1824
Abstract: 
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.
Subjects: 
In-kind provision
Status preferences
Majority voting
JEL: 
H42
D72
Document Type: 
Working Paper

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