Federal Reserve Bank of St. Louis
Majority Voting in a Model of Means Testing
We study a model of endogenous means testing where households differ in their income and where the in-kind transfer received by each household declines linearly with income. Majority voting determines the two dimensions of public policy: the size of the welfare program and the means-testing rate. We establish the existence of a sequential majority voting equilibrium, when the households vote first on the size of the program and then on the means-testing rate. We show that the means-testing rate increases with the size of the program but the fraction and the identity of the households receiving the transfers are independent of the program size.
Cite this item
Buly A. Cardak & Gerhard Glomm & B. Ravikumar, Majority Voting in a Model of Means Testing, Federal Reserve Bank of St. Louis, Working Papers 2018-14, 01 Jun 2018.
- D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
Keywords: Sequential majority voting; Means testing; Political support; Targeting
This item with handle RePEc:fip:fedlwp:2018-014
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