Measuring Attitudes towards Public Spending using a Multivariate Tax Summary Experiment

It is difficult to measure public views on tradeoffs between spending priorities because public understanding of existing government spending is limited and the budgetary problem is complicated. We present a new measurement strategy using UK taxpayer summaries as the baseline for a continuous treatment, multivariate choice experiment. The experiment proposes deficit neutral bundles of changes in spending and taxation, allowing us to investigate attitudes towards modifications to the existing budget. We then use a structural choice model to estimate public preferences over 13 spending categories and the taxation level, on average and as a function of respondent attributes. We find that the UK public favours paying more in tax to finance large spending increases across major budget categories; that spending preferences are multidimensional; and that younger people prefer lower levels of taxation and spending than older people. Finally, we report a pre-registered out-of-sample validation of the estimates from the experiment.