Why Do Education Vouchers Fail at the Ballot Box?

Bearse, Peter; Cardak, Buly A.; Glomm, Gerhard; Ravikumar, B.

doi:10.2139/ssrn.2038876

Cited by 5 publications

(8 citation statements)

References 29 publications

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“…For example, Cohen-Zada and Justman (2003) examines public education spending, Kotakorpi and Laamanen (2010) looks at public health care spending, and Brunner and Ross (2010) focuses on local public spending decisions. And a recent paper by Bearse et al (2013) calibrates a theoretical model similar to the one we adopt under the status quo (a system of opting-out) to match U.S. data and demonstrates that a uniform voucher system (similar to a system of topping-up) will never receive majority-support. But, to our knowledge, no empirical studies have directly tested the predictions of these models regarding the equilibrium level of the public provision of the private good under alternative mixed systems of finance.…”

Section: Introductionmentioning

confidence: 93%

“…The theoretical framework we adopt is based on standard majority-rule models of tax-financed public provision of a private good (see, e.g., Epple and Romano, 1996a;Myers and Lülfesmann, 2011;Bearse et al, 2013). Below, we outline the main features of these models and the specific functional form for household preferences that we use in each of the three treatments we consider (public finance only, mixed financing with a top-up option and with an opt-out option), and state the theoretical predictions.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

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Support for public provision of a private good with top-up and opt-out: A controlled laboratory experiment

Buckley

Cuff

Hurley

et al. 2015

Journal of Economic Behavior & Organization

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a b s t r a c tThis paper presents the results of a revealed-choice experiment testing the theoretical predictions of political economy models regarding public support for a publicly provided private good financed with proportional income taxes when individuals can purchase the good privately and either continue to consume public provision ('top-up') or forego public provision ('opt-out'), but in each case continue to pay income taxes. Our laboratory results confirm behavior is consistent with the predicted majority-preferred tax rate under mixed financing with top-up, but we identify preferences for significantly higher rates of public provision than predicted under mixed financing with opt-out. Using non parametric regression analysis, we explore the relationship between individuals' top-up and opt-out decisions and both their income levels and the implemented tax rates.

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Section: Introductionmentioning

confidence: 93%

Section: Theoretical Frameworkmentioning

confidence: 99%

Support for public provision of a private good with top-up and opt-out: A controlled laboratory experiment

Buckley

Cuff

Hurley

et al. 2015

Journal of Economic Behavior & Organization

View full text Add to dashboard Cite

show abstract

“…To implement the theoretical environment in a laboratory setting we adopt a discrete income distribution and a specific utility function to obtain closed-form solutions. 3 The specific utility function and the assumed parameter values we use are based on Buckley et al (2015).…”

Section: Theoretical Frameworkmentioning

confidence: 99%

“…The lowest-income household will be indifferent between exiting or not since a public system with only one household is equivalent to a private-finance only system. The amount of private good consumed by each household will be given by (3). Allowing for universal-exit is predicted to result in a system of private-finance only.…”

Section: Mixed Financing: Universal-exit Optionmentioning

confidence: 99%

“…The public system will consist of all households with incomes below the threshold income level, denoted byN < N , and the analysis of this public system is the same as the one described in section 2.1 with N replaced byN . Again, privately purchased amounts of H by those who exit the public system are given by (3).…”

Section: Mixed Financing: Conditional-exit Optionmentioning

confidence: 99%

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Should I stay or should I go? Exit options within mixed systems of public and private health care finance

Buckley

Cuff

Hurley

et al. 2016

Journal of Economic Behavior & Organization

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Mixed public-private finance is widespread in health care systems internationally. In one variant of mixed finance, some countries (e.g., Germany) allow eligible beneficiaries to fully exit from the public (social insurance) system and purchase private insurance. Using a controlled laboratory experiment, we empirically investigate the predictions of a political economy model of mixed systems of public and private finance with two types of exit: universalexit, when all individuals can choose to exit the public system, and conditional-exit, when only individuals with an income at or above a threshold income level can choose to exit.We find that high-income individuals are less likely to exit under universal-exit than under conditional-exit, despite having the same incentive to exit in both treatments. Sensitivity treatments suggests that a number of factors may be at play in explaining this result, including learning effects, a priming effect and a framing effect, but that other-regarding preferences do not appear to be an important factor.

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Insurance by Government or Against Government? Overview of Public Risk Management Policies

Libich

Macháček

2016

Journal of Economic Surveys

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In what contexts is it desirable that the government, rather than the private sector, takes on the role of an insurer and helps people reduce risks? Our discussion implies that while in a number of areas individuals benefit from well‐designed insurance provided by their government, ill‐designed public policies (for example existing pay‐as‐you‐go pension systems) force individuals to insure against their government. It is further discussed how governments could improve their risk managing role in many areas by using income contingent loans, provided the country has high‐quality institutions and governance. Such loans to artists, sportspeople, flood victims or collapsing financial institutions would replace the existing nonrepayable transfers, grants, subsidies and bailouts. Using a simple efficiency‐equity‐sustainability framework for comparing income contingent schemes with conventional public and private insurance policies, we document that this would enable governments to extend their insurance assistance to a greater number of people and institutions – in a way that is not only equitable but also efficient and fiscally sustainable.

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Why Do Education Vouchers Fail at the Ballot Box?

Cited by 5 publications

References 29 publications

Support for public provision of a private good with top-up and opt-out: A controlled laboratory experiment

Support for public provision of a private good with top-up and opt-out: A controlled laboratory experiment

Should I stay or should I go? Exit options within mixed systems of public and private health care finance

Insurance by Government or Against Government? Overview of Public Risk Management Policies

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