Some Estimates of the Distribution of Benefits from Los Angeles City Government Activity

Abstract

Analysis of the distribution of benefits generated by Los Angeles city government activity suggests that Los Angeles expenditure patterns may not be pro-poor. Benefits from nine program areas of service delivery are estimated and distributed to various income classes. For each program area a wide range of incidence assumptions is made. Results suggest that for the entire range of assumptions the lowest class does not benefit more than other classes. Furthermore for some assumptions the lowest class is significantly worse off. If the lowest class is ignored in the analysis, the remaining classes are treated identically under all assumptions. Because other studies have found such pro-poor expenditure patterns, these results may imply that Los Angeles is atypical of large U.S. cities. One reason for this difference may be that Los Angeles does not provide the education, welfare or health services that some large cities provide. In Los Angeles these services are provided by county or district level governments so benefits from these pro-poor services are not at all due to Los Angeles city government activity.