Chapter 88 Voluntary Provision of Public Goods

Publisher This chapter discusses that redistributing resource endowments from people who contribute to public goods to other people who contribute to public goods will have no effect on the aggregate contributions to public goods. However, redistribution from non-contributors to contributors will result in an increase in the provision of public goods. A model which incorporates equity theory is used to generate alternative hypotheses for the behavior of individual contributors. Aggregate contribution data from three-person public goods environments support the neutrality theorem originally when endowments were redistributed among contributors. The individual contribution data, however, did not support the predictions of the conventional model. Individuals with relatively high endowments tended to under-contribute, relative to the conventional predictions, while individuals with relatively low endowments over-contributed.