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The Price Elasticity of Mass Preferences

Published online by Cambridge University Press:  02 September 2013

Donald Philip Green
Donald Philip Green*
Affiliation:
Yale University
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Abstract

I compare the price elasticity of economic and political preferences. My central hypothesis is that willingness to pay, whether expressed verbally or through cash transactions, is more price-elastic for economic consumption goods than for public goods. I find that increases in price greatly diminish the proportion of people willing to pay for consumer goods, such as housing or hardback books; whereas the proportion willing to pay more in taxes to support a public good, such as environmental protection or shelter for the homeless, is much less responsive to changes in price. I conclude by discussing the theoretical and political implications of willingness to pay for public and private goods.

Type
Research Article
Information
American Political Science Review , Volume 86 , Issue 1 , March 1992 , pp. 128 - 148
Copyright
Copyright © American Political Science Association 1992 

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