What Determines Local Authorities' Capital Expenditure on Housing? An Evaluation of Various Models

There is a wide variety of theoretical models for explaining expenditure variations across local authorities. These include the demographic approach, agency models, party effect models and incrementalism. In this paper we examine inter-authority variations in housing capital expenditure, testing each of the four models against data for English local authorities for the period 1981/82 and 1986/87. We develop a comprehensive behavioural model, incorporating elements from all the models tested. Finally, we draw conclusions and briefly discuss their implications in the light of proposed changes to British local authority housing finance.