Good Resident Preferences And Public Goods Essay Example

Resident preferences of a population are determined by the provision of public goods by the state and local authorities. Public goods are those goods that are non-excludable, and one person’s consumption does not diminish the amount available to the other person.
However, provision of these public goods is faced with two related problems, that is, preference revelation and preference financing. Preference revelation is further compounded by the fact that the state and local authorities may not ask residents for their preferences. Why? Because the residents may want to the reason and know how their tax bill would be related to the goods that will be provided.
In addition, there is the lack of a proper mechanism in order to induce the residents to reveal their preferences. As a result, preference revelation problem is overcome by inter-state competition by the local governments. Consequently, residents and households are left to sort over jurisdictions according to their preferences of local public goods (Donovan, et al, 71).
Policies that do not reflect the tastes and preferences of the local jurisdiction residents, therefore, lower the property values and any politician who supports such kind of policies contends with the voters’ displeasure at the ballot box. As a result officials of the state and local authorities have to come up with policies that will reflect the residents’ preferences.
Failure to do so will lead to the officials being kicked out. And since the voters have the power to determine elections, that is, power of public accountability, the budgets by the local authorities may be drafted in a way that will appease the residents of that particular community. Preference-budgeting will ensure that the politicians retain their seats in the next election.
Moreover, residents choose their residence among communities solely on the basis of their demand for the local public goods that are provided in areas where they reside. Therefore, there is a tendency for residents to be attracted by particular goods according to their preferences (Donovan, et al, 71). Area residents are left with two options; that is either to kick out officials who do not meet their preferences or move on to other states where provision of goods meets their preferences.
As a result, budgets by the local government may tend to reflect the resident's preferences. Such a result is further be explained by the Tiebout equilibrium whereby, residents with similar preferences tend to congregate in communities where their preferences are similar.

Massachusetts and Texas Residents Preferences

According to the statistics presented in the table above, it is evident that the population of Texas is way above that of Massachusetts with close to twenty million. However, looking at the welfare spending per state, Texas spends more on welfare per capita as compared to Massachusetts. On the other hand, however, in terms of education spending per student, Texas lags way behind Massachusetts with a figure of $746 (www.governing.com). The figure in Massachusetts is $13590 meaning that the state has placed more emphasis on education spending as compared to Texas.
The distribution of Medicaid is based on enrollment that is based on two age groups of adults and children. Adults are placed into the category of 19-64 years, and it is evident that Massachusetts has a high enrollment percentage as compared to Texas. However, if the comparison was to be done on the basis of size, then Texas has over three million adults enrolled in the program compared to around two million in Massachusetts.
This comparison of size, however, is not an appropriate indicator since it does not give a wholesome outlook of the population in terms of percentage. As such, Massachusetts has a high enrollment number as compared to Texas. The state and local tax revenue per capita in Massachusetts, $5574, is higher as compared to Texas that stands at $3750 (www.twc.state). In addition, the maximum unemployment benefits in Massachusetts are also higher relative to that of Texas.
These disparities can in one way be explained by the presence of established income taxes in the two states. Texas lacks a well-established income tax mechanism, and this explains its low figure of the local tax revenue per capita. On the contrast, Massachusetts has a well-established income tax framework, meaning that it can generate a lot of revenue from the income tax and hence a high revenue per capita.
Massachusetts is also a wealthy state as compared to Texas, and this partly explains its preference for the local government spending. That is, where local public goods are financed through avenues such as property tax, households with more valuable homes subsidize them by taking fewer valuable ones.

Works Cited

Donovan, T, Smith, D, Mooney, C. State and Local Politics: Institutions and Reform: the Essentials. Cengage Learning, 2011. Print. State & Local Politics: Institutions & Reform: The Essentials." Google Books. 1 Jan. 2011. Web. 20 Feb. 2015. <https://books.google.co.ke/books?id=rgvEmk-gM0oC&pg=PA291&lpg=PA291&dq=massachusetts and texas preference for government spending&source=bl&ots=qRnH4BKsxq&sig=3g4tZ8eOaVzBc6OONi5g45-3qyI&hl=en&sa=X&ei=aOTmVMjZNKH6ywOE5YLQBQ&redir_esc=y#v=onepage&q=massachusetts and texas preference for government spending&f=false>.
"Eligibility & Benefit Amounts." - Texas Workforce Commission. Web. 20 Feb. 2015. <http://www.twc.state.tx.us/jobseekers/eligibility-benefit-amounts>.
"Education Spending Per Student by State." Education Spending Per Student by State. Web. 20 Feb. 2015. <http://www.governing.com/gov-data/education-data/state-education-spending-per-pupil-data.html>.
"Population Estimates, July 1, 2014, (V2014)." QuickFacts. Web. 20 Feb. 2015. <http://www.census.gov/quickfacts/>.
Web. 20 Feb. 2015. <http://jobsearch.about.com/od/unemployment/a/weekly-unemployment-benefits>.