Český finanční a účetní časopis 2014(2):92-105 | DOI: 10.18267/j.cfuc.397

Cost of Service Approach to the Measurement of Public Expenditure Incidence

Barbora Slintáková
Doc. Ing. Barbora Slintáková, Ph.D. - docentka; Katedra veřejných financí, Fakulta financí a účetnictví, Vysoká škola ekonomická v Praze, Nám. W. Churchilla 4, 130 67 Praha 3; <barbora@vse.cz>.

Research on public expenditure incidence is not as extensive as the tax incidence study even though it is important as well. The problem of the public expenditure incidence is identification of individuals on whose behalf public expenditures are made and calculation of their benefits. There are two ways how to approach to this problem. The behavioural approach is theoretically pure but it is very demanding for data. That is why the benefits are approximated with budget amounts in the cost of service approach. This paper distinguishes this approach from the behavioural one and describes its limitations. Then it provides details about the procedure of incidence analysis applied on the state budget expenditures in the Czech Republic. To determine which households benefited - and how much - from the state budget expenditures a microsimulation model was developed using the Household Budget Survey sample. Results show that lower-income households received larger benefits from the state budget expenditures in the given year than higher-income households on an annual basis.

Keywords: Benefit incidence analysis; Fiscal incidence; Public expenditure.
JEL classification: H22

Published: June 1, 2014  Show citation

ACS AIP APA ASA Harvard Chicago Chicago Notes IEEE ISO690 MLA NLM Turabian Vancouver
Slintáková, B. (2014). Cost of Service Approach to the Measurement of Public Expenditure Incidence. Czech Financial and Accounting Journal, 2014(2), 92-105. doi: 10.18267/j.cfuc.397
Download citation
  • BibTeX (.bib)
  • Bookends (.ris)
  • EasyBib (.ris)
  • EndNote (.enw)
  • EndNote 8 (.xml)
  • ISI WoS (.isi)
  • Medlars (.medlars)
  • Mendeley (.ris)
  • MODS (.xml)
  • Papers (.ris)
  • RefWorks (.txt)
  • RefManager (.ris)
  • RIS (.ris)
  • MS Word (.xml)
  • Zotero (.ris)
    • Open full article

    References

    1. Aaberge, R. - Langørgen, A. (2006): Measuring the Benefits from Public Services: The Effects of Local Government Spending on the Distribution of Income in Norway. [online], Review of Income and Wealth, c2006, roč. 52, č. 1, s. 61-83, [cit. 21. 3. 2014], <http://vse.summon.serialssolutions.com>. Go to original source...
    2. Aaberge, R. - Langørgen, A. - Lindgren, P. (2013): The Distributional Impact of Public Services in European Countries. [online], Luxembourg, Publications Office of the European Union. c2013, [cit. 29. 2. 2014], <http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-RA-13-009/EN/KS-RA-13009-EN.PDF>.
    3. Aaron, H. - McGuire, M. (1970): Public Goods and Income Distribution. Econometrica, 1970, roč. 38, č. 6, s. 907-920. Go to original source...
    4. ABS (2007): Government Benefits, Taxes and Household Income. [online], Canberra, Australian Bureau of Statistics, c2007, [cit. 2. 3. 2014], <http://www.ausstats.abs.gov.au/Ausstats/subscriber.nsf/0/30A1BDA7F5A93A9CCA2572F800133897/$File/65370_2003-04.pdf>.
    5. ABS (2012): Government Benefits, Taxes and Household Income. [online], Canberra, Australian Bureau of Statistics, c2012, [cit. 29. 2. 2014], <http://www.ausstats.abs.gov.au/ausstats/subscriber.nsf/0/FA33862EE0D34EEECA257A750014E5DF/$File/65370_2009-10.pdf>.
    6. Brennan, G. (1976): The Distributional Implications of Public Goods. Econometrica, 1976, roč. 44, č. 2, s. 391-399. Go to original source...
    7. Demery, L. (2000): Benefit Incidence: a Practitioner´s Guide. [online], Washington, D. C., World Bank, c2000, [cit. 2. 3. 2014], <http://wwwwds.worldbank.org/external/default/main?pagePK=64193027πPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&theSitePK=523679&entityID=000160016_20060202161329&searchMenuPK=64187283&theSiteP K=523679>.
    8. Dodge, D. A. (1975): Impact of Tax, Transfer, and Expenditure Policies of Government on the Distribution of Personal Income in Canada. Review of Income and Wealth, 1975, roč. 21, č. 1, s. 1-52. Go to original source...
    9. Ebert, U. - Tillmann, G. (2006): Budget Incidence Reconsidered. [online], Journal of Economics, 2006, roč. 88, č. 1, s. 1-19. Go to original source...
    10. Gillespie, W. I. (1965): Effect of Public Expenditures on the Distribution of Income. In: Musgrave, R. A. (ed.): Essays in Fiscal Federalism. Washington, D. C., Brookings Institution, 1965, s. 122-186.
    11. Glennerster H. (2006): Tibor Barna: The Redistributive Impact of Taxes and Social Policies in the UK: 1937-2005. [online], London, London School of Economics, Centre for Analysis of Social Exclusion, CASE/115,c2006, [cit. 2. 3. 2014], <http://eprints.lse.ac.uk/3880/1/Tibor_Barna%2Dthe_redistributive_impact_of_taxes_and_social_policies_in_the_UK_1937%2D2005.pdf>.
    12. Harding, A. - Warren, N. - Lloyd, R. (2006): Moving Beyond Traditional Cash Measures of Economic Well-Being: Including Indirect Benefits and Indirect Taxes. [online], Canberra, University of Canberra, c2006, [cit. 2. 3. 2014], <http://www.natsem.canberra.edu.au/storage/dp61.pdf >.
    13. Chamberlain, A. - Prante, G. (2007): Who Pays Taxes and Who Receives Government Spending? An Analysis of Federal, State and Local Tax and Spending Distributions, 19912004. [online], Washington D. C., Tax Foundation, Working Paper č. 1, c2007, [cit. 23. 4. 2007], <http://taxfoundation.org/sites/default/files/docs/wp1.pdf>.
    14. Kim, K. - Lambert, P. (2007): Redistributive Effect of U. S. Taxes and Public Transfers, 1994-2004. [online], Eugene, University of Oregon, c2007, [cit. 2. 3. 2014], <http://economics.uoregon.edu/papers/UO-2007-3_Lambert_Redistributive.pdf>. Go to original source...
    15. Klazar, S. - Slintáková, B. (2004): Vliv daní a sociálních transferů na rozdělení příjmů v České republice. Acta Oeconomica Pragensia, 2004, roč. 12. č. 7, s. 26-41.
    16. Klazar, S. - Slintáková, B. (2009): Analýza fiskálního dopadu státního rozpočtu České republiky. [online], Praha, Vysoká škola ekonomická, c2009, [cit. 2. 5. 2010], <http://f1.vse.cz/veda-a-vyzkum/projekty/abc/>.
    17. Lambert, P. J. (2001): The Distribution and Redistribution of Income. Manchester, Manchester University Press, 2001.
    18. Lambert, P. J. - Nesbakken, R. - Thoresen, T. O. (2010): On the Meaning and Measurement of Redistribution in Cross-Country Comparisons. [online], Luxembourg Income Study, c2010, [cit. 2. 7. 2010], <http://www.lisproject.org/publications/liswps/532.pdf>.
    19. Lustig, N. - Higgins, S. (2012): Commitment to Equity Assessment (CEQ): Estimating the Incidence of Social Spending, Subsidies and Tax Handbook. [online], New Orleans, Tulane University, c2012, [cit. 29. 2. 2014], <http://econ.tulane.edu/RePEc/pdf/tul1219.pdf>.
    20. Lustig, N. - Pessino, C. - Scott, J. (2013): The Impact of Taxes and Social Spending on Inequality and Poverty in Argentina, Bolivia, Brazil, Mexico, Peru and Uruguay: An Overview. [online], New Orleans, Tulane University, c2013, [cit. 29. 8. 2013], <http://econ.tulane.edu/RePEc/pdf/tul1313.pdf>.
    21. Maital, S. (1973): Public Goods and Income Distribution: Some Further Results. [online], Econometrica, 1973, roč. 41, č. 3, s. 561-568. Go to original source...
    22. Martinez-Vazquez, J. (1982): Fiscal Incidence at the Local Level. Econometrica, 1982, roč. 50, č. 5, s. 1207. Go to original source...
    23. Martinez-Vazquez, J. (2001): The Impact of Budgets on the Poor: Tax and Benefit Incidence. [online], Atlanta, Georgia State University, c2001, [cit. 29. 8. 2013], <http://aysps.gsu.edu/isp/files/ispwp0110.pdf>.
    24. Menchik, P. L. (1991): The Distribution of Federal Expenditures. [online], National Tax Journal, 1991, roč. 44, č. 3, s. 269-276. Go to original source...
    25. Paulus, H. - Winer, S. L. (2010): Fiscal Incidence When Both Individual Welfare and Family Structure Matter: The Case of Subsidization of Home-care for the Elderly. [online], Torino, ICER, c2010, [cit. 2. 7. 2010], <http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1626700>.
    26. Paulus, A. aj. (2009): The Effects of Taxes and Benefits on Income Distribution in the Enlarged EU. [online], Essex, EUROMOD, c2009, [cit. 2. 7. 2010], <http://www.iser.essex.ac.uk/publications/working-papers/euromod/em8-09.pdf>.
    27. Paulus, A. - Sutherland, H. - Tsakloglou, P. (2009): The Distributional Impact of In Kind Public Benefits in European Countries. [online], Essex, EUROMOD, c2009, [cit. 2. 7. 2010], <http://econpapers.repec.org/paper/eseemodwp/em10_2f09.htm>.
    28. Piggott, J. - Whalley, J. (1987): Interpreting Net Fiscal Incidence Calculations. [online], The Review of Economics and Statistics, 1987, roč. 69, č. 4, s. 685-694. Go to original source...
    29. Reynolds, M. - Smolensky, E. (1974): The Post Fisc Distribution: 1961 and 1970 Compared. [online], National Tax Journal, 1974, roč. 27, č. 4, s. 419-438. Go to original source...
    30. Ruggeri, G. (2005): Public Expenditure Incidence Analysis. In: Shah, A. (Ed.): Public Expenditure Analysis. [online], Washington D. C., International Bank for Reconstruction and Development / World Bank, c2005, [cit. 2. 3. 2014], <http://siteresources.worldbank.org/PSGLP/Resources/PublicExpenditureAnalysis.pdf>.
    31. Ruggles, P. - O'Higgins H. (1981): The Distribution of Public Expenditure among Households in the United States. Review of Income and Wealth, 1981, roč. 27, č. 2, s. 137164. Go to original source...
    32. Selden, M. T. - Wasylenko, M. J. (1992): Benefit Incidence Analysis in Developing Countries. [online], Washington D. C., World Bank, c1992, [cit. 2. 3. 2008], <http://www-wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/1992/11/01/000009265_3961003154857/Rendered/PDF/multi0page.pdf>.
    33. Schneider, O. - Jelínek, T. (2005): Distributive Impact of Czech Social Security and Tax Systems: Dynamics in Early 2000´s. Prague Economic Papers, 2005, roč. 14, č. 3, s. 221237. Go to original source...
    34. Smeeding, T. M. (2005): Public Policy, Economic Inequality, and Poverty: The United States in Comparative Perspective. Social Science Quarterly, 2005, roč. 86, č. 1, s. 955983. Go to original source...
    35. Tax Foundation (1967): Tax Burdens and Benefits of Government Expenditures by Income Class, 1961 and 1965. [online], Washington, D. C., Tax Foundation, c1967, [cit. 2. 3. 2014], <http://www.taxfoundation.org/news/show/1764.html>.
    36. Tonkin, R. - Lewis, J. - Thomas, N. (2013): The Effects of Taxes and Benefits on Household Income, 2011/12 - Further Analysis and Methodology. [online], Newport, Office for National Statistics, c2013, [cit. 29. 8. 2013], <http://www.ons.gov.uk/ons/dcp171766_317895.pdf>.
    37. Večerník, J. (2006): Income Taxes and Benefits among Czech Employees: Changes since 1989 and a Cross-National Comparison. Finance a úvěr, 2006, roč. 56, č. 1-2, s. 2-17. Go to original source...
    38. Wolff, E. - Zacharias, A. (2006): An Overall Assessment of the Distributional Consequences of Government Spending and Taxation in the United States, 1989 and 2000. In: Papadimitriou, D. (ed.): The Distributional Effects of Government Spending and Taxation. London, Palgrave Macmillan, 2006. Go to original source...

    This is an open access article distributed under the terms of the Creative Commons Attribution 4.0 International License (CC BY 4.0), which permits use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.


    Return to the content