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Social Status Concerns and the Political Economy of Publicly Provided Private Goods
[Housing markets and structural policies in OECD countries]

Author

Listed:
  • Jana Friedrichsen
  • Tobias König
  • Tobias Lausen

Abstract

We analyse 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 characterise the coalitions that can prevail in a political equilibrium.

Suggested Citation

  • Jana Friedrichsen & Tobias König & Tobias Lausen, 2021. "Social Status Concerns and the Political Economy of Publicly Provided Private Goods [Housing markets and structural policies in OECD countries]," The Economic Journal, Royal Economic Society, vol. 131(633), pages 220-246.
    • Handle: RePEc:oup:econjl:v:131:y:2021:i:633:p:220-246.
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    File URL: https://hdl.handle.net/10.1093/ej/ueaa076
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    More about this item

    JEL classification:

    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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