DEMAND FOR PUBLICLY-PROVIDED GOODS

Abstract

Making use of a modified version of the Bergstrom-Goodman (1973) framework, this paper shall attempt to study, in the Singapore context via a number of expenditure areas, the effects and influence of the various components of the demand function, such as price, income and population. The empirical results obtained not only serves as an illumination on the Singapore experience of government growth but also as an exploration and validation of some theories in this area. The regression results showed that population, price, income, wage rate, interest rate and lagged expenditure coefficients have the expected signs, with some of the coefficients significantly different from zero. Theories proposed by Baumol, Wagner, Nikanen, Romer and Rosenthal and others, are shown to have relevance upon the subject at hand as the theories were affirmed by the results obtained.