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Author Hayashiy, Masayoshi
Source CiteSeerX
Content type Text
File Format PDF
Subject Domain (in DDC) Computer science, information & general works ♦ Data processing & computer science
Subject Keyword Technical Ine Ciencies ♦ Local Public Service ♦ Incentive Ect ♦ Behavioral Part ♦ Empirical Model ♦ Stochastic Property ♦ Cross-section Data ♦ Ort Choice ♦ Japanese Municipality ♦ Mis-speci Ed Model ♦ Distributional Assumption ♦ Incentive Factor ♦ Previous Applied Study ♦ Error Term ♦ Popular Method ♦ Local Government ♦ Local Public Nance ♦ Exogenous Ine Ciency Parameter ♦ Maximum Likelihood ♦ Public Production ♦ Technical Ine Ciency Term
Abstract This paper presents an empirical model of public production that allows us to statistically examine ‘incentive ’ factors that may in‡uence the internal e¤ort level of local governments. Our model theoretically validates the application of the frontier analysis to the study of the incentive e¤ect in local public …nance. We analytically show that the very factors that in‡uence the e¤ort choice a¤ect the moments of the technical ine¢ciency term in the frontier regression, whose stochastic property is based upon an exogenous ine¢ciency parameter that is unobservable to econometricians. We nonetheless show that the previous applied studies that claim to examine the incentive e¤ect are based upon mis-speci…ed models, by demonstrating that the incentive e¤ects are also present in the behavioral part of the frontier regression. Lastly, with cross-section data for Japanese municipalities, we provide an example that empirically im-plements our model to statistically examine the incentive e¤ect. Our model dispenses with the popular method of maximum likelihood, and therefore is robust against the distributional assumption of the error terms. 1
Educational Role Student ♦ Teacher
Age Range above 22 year
Educational Use Research
Education Level UG and PG ♦ Career/Technical Study
Learning Resource Type Article
Publisher Date 2002-01-01