Micro-Based Estimatesof Demand Functions for Local School Expenditures

Ted Bergstrom, University of California, Santa Barbara
Daniel L. Rubinfeld, University of California, Berkeley
Perry Shapiro, University of California, Santa Barbara

Abstract

We devise and apply a new method for estimating demand for local public goods from survey data. Individuals' responses to questions about whether they wanted more, less, or the same amount of various local public goods are combined with observations of their incomes, tax rates, and the amounts of actual spending in their home communities. Parameter estimates turn out to be quite similar to those found with studies like Bergstrom and Goodman's study based on total expenditures across communities.