The economics and empirics of the allocation of public consumption expenditures

The paper investigates the allocation of public consumption expenditures in the UK. After reviewing the empirical literature on the demand for public services, which is based on applied consumer analysis, it discusses the budgetary making process in the UK. It proceeds by estimating a system of demand equations for general government consumption expenditures in the UK during the period 1963-96. In addition to estimating the effects of relative prices, total expenditure and demographic variables, it finds that the constraints of homogeneity and symmetry cannot be rejected.