TITLE:
Voluntary Contribution to Public Goods: Preferences and Wealth
AUTHORS:
Oskar Nupia
KEYWORDS:
Public Goods, Private Provision, Neutrality, Income Distribution
JOURNAL NAME:
Theoretical Economics Letters,
Vol.6 No.3,
June
3,
2016
ABSTRACT: This paper analyzes the role of wealth and its distribution in a model of
voluntary-contribution to public goods where individuals’ preferences for these
goods depend on the level of individual’s wealth. We find that under such circumstances
a small redistribution of wealth among contributors is not necessary neutral. We
then discuss the conditions under which a redistribution of wealth might improve
efficiency in the aggregate provision of public goods. Unlikely what common sense
might suggest, we show that a redistribution of wealth can increase the private
provision of public goods regardless of whether individuals’ valuations for these
goods increase or decrease as their level of wealth increases. Furthermore, we show
that under some circumstances, a regressive redistribution of wealth can increase
the provision of public goods.