Direct Democracy EXample of Lindahl's procedure Figure 6. 1 shows the relationship between each persons tax share quantity of fireworks demanded Each person demands more fireworks as the share of costs paid falls Shares add up to one: SA+SE=1 Lindahl prices: Each person faces a personalized price per unit of the public good, which depends on the tax share7 Direct Democracy: Example of Lindahl’s procedure • Figure 6.1 shows the relationship between each person’s tax share & quantity of fireworks demanded. • Each person demands more fireworks as the share of costs paid falls. • Shares add up to one: SA+SE=1 • Lindahl prices: Each person faces a “personalized price” per unit of the public good, which depends on the tax share