The Research On The Income Elasticity Of Quasi-public Goods Taking Basic Education As An Example

With the coming of the period of post-industrialization,the third industry is highly developed,individuals’ income has a significant increase,their demand level rises,and therefore individuals’ demand for quasi-public goods is different from which in the period of industrialization. Quasi-public goods share the characteristics of both public goods and private goods,with a non-monotonic elasticity to the income,which increases at first,and decreases later.I accordingly propose the hypothesis that the income elasticity of quasi-public goods applies to an upside down U shaped curve.To prove the stability of the hypothesis,I choose the basic education in city Hangzhou as the example of quasi-public goods,and a questionnaire survey is done to explore the income elasticity of local citizens.A double-logarithm regression is done to analyse the static income elasticity between different income groups,a calculation is done to find out the dynamic income elasticity inside each income group,and the results prove the hypothesis true and the income elasticity less than unity.It can be concluded that the increased demand for quasi-public goods with the rising income should expand at first,and shrink later.I therefore come up with the proposals that the expenditure on quasi-public goods should change according to citizens’demand,the quasi-public goods in the mentioned fields should be provided as private goods by the private sector,with a simultaneous shift of public expenditure to public goods of higher quality,and realize the equalization of public goods.