Lucy Barnes, Jack Blumenau, Benjamin E Lauderdale, “Measuring UK Attitudes towards Public Spending using a Multivariate Tax Summary Experiment”
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It is difficult to measure public views on tradeoffs between taxation and spending priorities because citizens’ understanding of existing levels of taxation and expenditure is limited and the budgetary problem of allocation across many spending domains is complicated. We present a new measurement strategy using widely-distributed UK taxpayer summaries as the baseline for a continuous treatment, multivariate choice experiment assessing budgeting trade-offs in the public mind. The experiment proposes bundles of changes in tax levels and spending categories that satisfy overall budget constraints, allowing us to investigate public preferences over the trade-offs that form the core of public budgeting. We then use a structural choice model to translate this data into estimates of average public preferences over 13 spending categories and the taxation level, as well as average preferences as a function of demographic and political attributes of citizens. We show that, on average, the UK public favours large spending increases across many different budget categories, even when that comes at the price of paying more in tax; that public preferences over spending are highly multidimensional; and that younger individuals prefer substantially lower levels of taxation and spending than older people. Finally, we report a pre-registered out-of-sample validation of the estimates from the main experiment.