Size of the middle class and the composing of spending of Brazilian municipalities

• Grant number: 14/06884-0
• Support Opportunities: Scholarships in Brazil - Scientific Initiation
• Start date: October 01, 2014
• End date: September 30, 2015
• Field of knowledge: Applied Social Sciences - Economics
• Principal Investigator: Luiz Guilherme Dácar da Silva Scorzafave
• Grantee: Tulio Anselmi Dorigan
• Host Institution: Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto (FEARP). Universidade de São Paulo (USP). Ribeirão Preto , SP, Brazil

Abstract

This project aims to define income groups of each Brazilian city. To do that it will be use the methodology proposed by Esteban et al (2007), which defines the income groups in a no ad-hoc manner. This endogenous definition of the income groups is appropriate for our project because there are differences in the income levels of each city - which can result on different income limits for each city. Besides, this project intends to analyze the impact of the relative size of the middle class over the composing of municipalities spending. The purpose of this analysis is to observe if there is a bigger (or smaller) pressure of the middle class on certain public spends. This will be done using a econometric model in which the results variables will be the city percentage of spent on education, health, sport and leisure, social assistance, culture, urbanism and labor; the variable of interest will be the relative size of the middle class; and will be used demographic, socioeconomic, electorate, political parties and politicians characteristics, as control variables.