Choice experiment assessment of public expenditure preferences

Abstract

Preferences for changes to public expenditures were evaluated using a choice experiment. Results indicate potential efficiency gains from reallocation of expenditures to items with higher marginal welfare. In particular, respondents were found to prefer more spending on health, education and the environment, with health spending providing the highest marginal benefits. The public preferred less expenditure on income support. The choice experiment also identified the impacts of demographic factors. The approach is offered as a complement to prior approaches that research public preferences for budget allocation, with prospects for revelation of richer information for informing social decisions.

Keywords:

• public expenditure preferences

Notes

1. Recent experimental design literature has questioned the need for orthogonality, and has illustrated advantages of alternative design strategies (Scarpa & Rose, 2008).

2. The authors are grateful to an anonymous reviewer for the latter point.