welfare dominance an application to commodity taxation in this paper the authors propose a method to identify commodity tax changes that will be favored by all individuals who can agree on certain weak assumptions with regard to the social welfare function the method is based on an extension of the criterion of second degree stochastic dominance and is illustrated using data from israel copyright 1991 by american economic association

on measures of excess burden and their application abstract new measures of the additional excess burden of a tax reform are proposed and are shown to be useful in three key policy applications these new measures induce a unique measure of marginal excess burden meb among its interesting properties meb is uniformly zero for a proportional tax on inelastically supplied labor problems in applying the standard measures of total excess burden are demonstrated it is concluded that the induced measure of the marginal cost of funds mcf should be regarded as the most useful concept in applied tax analysis

how to improve the performance of carbon tax in china abstract the chinese government committed to controlling carbon dioxide co 2 emissions and promoting development of non fossil fuels thus it becomes a top priority for the government to develop effective climate policies against such background this paper develops a new multi country computable general equilibrium cge model with detailed energy disaggregation this study evaluates the impact of single policy instrument carbon tax and combined policy mixes in order to investigate driving factors affecting the policy performance the main findings are as follows firstly the driving factors can be classified into two types the first type of factors affects cost effectiveness significantly while the second type generates considerable effect on emission performance secondly cross border externalities function as important barriers to the co 2 emission reduction since they imply extra competitiveness loss and result in considerable carbon leakage finally this paper considers two integrated policy mixes wherein carbon tax revenue is recycled to reduce capital tax or support clean energy subsidy these policy mixes can improve both cost effectiveness and emission performance and thus perform better than carbon tax alone in this way carbon tax revenue can be used to improve the performance looking ahead complicated policy mixes are preferred to improve the performance of china s carbon tax

marginal commodity tax reforms a survey as noted 30 years ago by martin feldstein optimal taxes may be useless for practical purposes and emphasis should instead be placed on the possibility of enhancing welfare by reforming existing tax rates in this perspective marginal commodity tax reforms are gaining increasing attention due to political and economic constraints on large reforms of direct or indirect taxation in this paper we summarize the main features and results of the literature on marginal commodity tax reforms pioneered by ahmad and stern further developed by yitzhaki and thirsk and recently reinterpreted by makdissi and wodon we establish new links to other fields of research namely the literature on the use of equivalence scales and on poverty measurement we also critically examine some issues associated with the implementation of marginal tax reforms with special reference to the calculation of welfare weights and revenue effects finally we suggest directions for future research on poverty reducing commodity tax reforms

levelized cost of electricity lcoe of renewable energies and required subsidies in china newhuadu business school research fund china sustainable energy program g 1305 18257 national social science foundation of china 12zd059 ministry of education 10 jbg 013

self selection and the efficiency of tournaments when exogenously imposed rank order tournaments have incentive properties but their overall efficiency is reduced by a high variance in performance bull schotter and weigelt 1987 however since the efficiency of performance related pay is attributable both to its incentive effect and to its selection effect among employees lazear 2000 it is important to investigate the ex ante sorting effect of tournaments this paper reports results from an experiment analyzing whether allowing subjects to self select into different payment schemes helps in reducing the variability of performance in tournaments we show that when the subjects choose to enter a tournament the average effort is higher and the between subject variance is substantially lower than when the same payment scheme is imposed sorting is efficiency enhancing since it increases the homogeneity of the contestants we suggest that the flexibility of the labor market is an important condition for a higher efficiency of relative performance pay

dalton improving indirect tax reform a tax reform is dalton improving if it improves social welfare for all possible social welfare functions that conform to hugh dalton s principle of transfers according to this principle there exists a prior social ranking of households and a transfer is approved if it it distributes from high ranking rich to low ranking poor households without altering the ranking itself in this paper the authors develop a procedure for identifying marginal dalton improving reforms in the context of indirect taxation the methodology is illustrated using data on excise taxes in the united kingdom copyright 1995 by american economic association

the cross country implications of alternative climate policies abstract because of worldwide growing concerns about global climate change great interest has been expressed in the potential of alternative climate policies to reduce global carbon emissions in this paper we compare cross country implications of alternative climate policies including unilateral and multilateral climate policies our main findings are as follows firstly there are large differences in cross country effects of alternative unilateral climate policies when the same given carbon emission reductions are achieved in each abating country respectively meanwhile cross border externalities undermine efficiency of unilateral climate policies secondly there are significant differences in cross country implications of alternative multilateral climate policies when the same global emission reductions are allocated in several different ways among abating countries thirdly it is difficult to reach a stable global climate treaty since any abating country has the incentive to argue for small carbon emission reductions finally multilateral climate policies can reduce the negative impacts of cross border externalities but cannot cure all cross border externalities looking ahead it will be a great policy challenge for the world to reduce carbon emissions in a cost effective way

an experimental study of incentive contracts for short and long term employees abstract motivated by real world observations of different contract offers we conduct a lab experiment to examine a principal s contract choice and agent effort in both long and short term employment relationships implemented as one shot and repeated games we find that a piece rate contract has the strongest incentive effect on short term agents effort and is the principals dominant choice nevertheless the bonus contract works almost as well as the piece rate contract for long term relationships but not so well for short term relationships in addition the bonus contract s effect on effort is mainly driven by the bonus component suggesting that a fixed wage alone is not an effective mechanism to improve workers performance

an asset allocation puzzle comment the purpose of this note is to look at the rationale behind popular advice on portfolio allocation among cash bonds and stocks we argue that the typical investment advice is not inconsistent with the behavior of risk averse expected utility maximizers we propose an additional solution to the asset allocation puzzle posed by niko canner et al 1997 who argue that popular advice contradicts financial theory because it is inconsistent with the capital asset pricing model capm mutual fund separation theorem the capm asserts that investors should hold the same selection of risky assets while popular advice is that investors should hold a proportion of bonds to stocks that increases with risk aversion using mean variance mv analysis and the capm canner et al show that recommended portfolios are far from optimal and that losses from the apparent failure of optimization are not substantial however they failed to explain the popular advice within an economic model we offer a rational model based on stochastic dominance to demonstrate that all popular financial advice portfolios belong to the efficient set for all risk averse investors using the historical annual real returns on bonds and stocks in canner et al we cannot ascertain that investment advisors indeed offer bad advice rather we maintain that acting as agents for numerous clients advisors recommend portfolios that are not inefficient for all risk averse investors i overview

welfare analysis of tax reforms using household data abstract this paper discusses a methodology for calculating the distribution of gains and losses from a policy change using data for a large sample of households estimates are based on the equivalent income function which is money metric utility defined over observable variables this enables calculations to be standardised and a computer program to compute the statistics presented in the paper is available for a general demand system equivalent income is related to measures of deadweight loss and standard errors are computed for each of the welfare measures an application to u k data for 5 895 households is given which simulates a reform that involves eliminating housing subsidies

the approach to realizing the potential of emissions reduction in china an implication from data envelopment analysis abstract by proposing a three hierarchy meta frontier data envelopment analysis dea this paper first decomposes co 2 emissions efficiency and the potential for emissions reduction into the following three components structural technical and management based on these components we then conduct an empirical analysis of china s total factor co 2 emissions efficiency its potential for co 2 emissions reduction and its corresponding implementation path the results show that co 2 emissions efficiency in mainland china is relatively low because of structural inefficiency technical inefficiency and management inefficiency the chinese government is expected to realize a large quantity of co 2 emissions reduction potential nearly 40 of the current total co 2 emissions through adjusting the industrial structure narrowing the technology gap among regions promoting the reform of marketization and strengthening environmental regulation the causes of co 2 emissions inefficiency and the distribution of potential reductions in emissions show a distinct spatial difference characteristic therefore this paper also formulates emissions reduction strategies for china s 30 provinces according to their specific situations noting the direction of the industrial structure adjustment and the path to improving co 2 emissions efficiency

incentives in organizations n 1975 steven kerr published on the folly of rewarding a while hoping for b the argument was simple you get what you pay for kerr distilled this unifying theme from a disparate set of examples involving politicians soldiers doctors orphanage directors professors and students as well as manufacturing and clerical employees and even human resource managers from these examples kerr pp 77980 concluded that two main causes of distorted incentives are fascination with an objective criterion where individuals seek to establish simple quantifiable standards against which to measure and reward performance and overemphasis on highly visible behaviors when some parts of the task are highly visible while others are not it took agency theory 15 years to express kerr s title not to mention to evaluate or extend his conclusions during this period agency theory was obsessed with the tradeoff between incentives and insurance even though clear eyed observations like kerr s about the design and performance of real incentive contracts suggested that several other issues are at least as important fortunately recent work has brought agency theory not only to kerr s position but beyond in this paper i summarize four new strands in agency theory that help me think about incentives in real organizations as a point of departure i begin with a quick sketch of the classic agency model i then discuss static models of objective performance measurement that sharpen kerr s argument repeated game models of subjective performance assessments incentives for skill development rather than simply for effort and incentive contracts between versus within organizations i con

input substitution effect in china s chemical industry evidences and policy implications abstract the chemical industry is one of the six high energy consuming and emission intensive sectors in china and the chinese government has focused its attention on energy saving and emissions reduction in the sector with the aim of contributing to the objective of energy saving and emission reduction in the sector this article studies the external substitution relationship of capital energy and labor energy using the translog production function and ridge regression the results are as follow the output elasticities of energy labor and capital are positive the substitution elasticities of capital labor capital energy and labor energy are positive and stable and their values are close to 1 which indicates that the three factors are substitutes for one another furthermore based on the above function we measure the level of energy saving and emissions reduction under different scenarios in 2012 policy implications of the results are provided

you get what you pay for incentives and selection in the education system we analyse worker self selection with a special focus on teachers to explore whether worker composition is generally endogenous we analyse laboratory experimental data to provide causal evidence on particular sorting patterns our field data analysis focuses specifically on selection patterns of teachers we find that teachers are more risk averse than employees in other professions indicating that relatively risk averse individuals sort into teaching occupations under the current system using survey measures on trust and reciprocity we find that teachers trust more and are less negatively reciprocal than other employees and establish differences in personality based on the big five concept

guidelines on searching for a dalton improving tax reform this article documents the search for a dalton improving tax and expenditure reform using a methodology developed by yitzhaki and slemrod 1991 and mayshar and yitzhaki 1995 the methodology overcomes the need to define a specific social welfare function by searching instead for reforms that improve each social welfare function belonging to a wide class of functions the authors apply the method to the energy sector of indonesia ignoring distributional constraints and find that both the subsidy on kerosene and the tax on gasoline should be reduced but taking distributional concerns into account the present structure of energy taxes is reasonable and the country may benefit by increasing the subsidy to kerosene taxing electricity and reducing the gasoline tax these conclusions are robust to changes in the relevant parameters representing the indonesian economy

how large are the impacts of carbon motivated border tax adjustments on china and how to mitigate them shandong social science planning fund program 12djjj12 independent innovation foundation of shandong university iifsdu 2012gn038 ministry of education research of social sciences youth funded projects 13yjc790065 national natural science foundation of china 71203186 71173170 china postdoctoral science foundation 2013m530309 2012t50802

the power of incentives variable pay is usually defined as pay that is tied to some measure of worker output the most typical form of variable pay historically was the piece rate which was more prevalent during the early part of the 20th century than it is at the beginning of the 21st there is a resurgence in variable pay particularly as it relates to executives whose pay is tied to output through some mechanism like stock options or bonuses that depend on individual or firm performance why use variable pay the typical reaction is that variable pay provides incentives to put forth effort although true discrete pay schemes also generate incentives much of the confusion in the literature results from the use of the terms high powered and low powered incentives which connote difference in ability to elicit worker effort it is more informative to make distinctions between discrete and continuous pay and between inputbased and output based pay 2 pay structures can be summarized by the following equation

border carbon adjustments addressing emissions embodied in trade approximately one fourth of global emissions are embodied in international trade and a significant portion flows from non carbon priced to carbon priced economies border carbon adjustments bcas figure prominently as instruments to address concerns arising from unilateral climate policy estimating the volume of emissions that could be potentially taxed under a bca scheme has received little attention until now this paper examines how a number of issues involved in the implementation of bcas can affect their ability to cover emissions embodied in trade and thus address carbon leakage these issues range from ensuring compliance with trade provisions and assumptions on the carbon intensity of imports to determining which countries are included and whether intermediate and final demand are considered here we show that the volume of co2 captured by a scheme that involved all annex b countries could be significantly reduced due to these issues particularly by trade provisions such as the principle of best available technology bat as a consequence the tariff burdens faced by non annex b parties could dwindle considerably these findings have important policy implications as they question the effectiveness and practicalities of bcas to reduce carbon leakage and alleviate competitiveness concerns adding further arguments against their implementation

regional energy efficiency carbon emission performance and technology gaps in china a meta frontier non radial directional distance function analysis abstract at present china is the largest primary energy consumer and carbon emitter in the world meantime china is a large transitional economy with significant regional gaps against such backgrounds the calculated results of energy and carbon performance indicators may be biased without considering heterogeneity across regions to this end after incorporating region heterogeneity this paper provides detailed information regarding energy efficiency carbon emission performance and the potential of carbon emission reductions from regional perspectives which may be important and useful for policy makers our main findings are as follows firstly there is significant group heterogeneity across regions in china in terms of energy efficiency and carbon emission performance secondly there are no considerable differences between total factor and single factor performance indices since there is limited substitutability between energy inputs and other production inputs finally significant carbon emission reductions can be made by catching up for regions with low energy efficiency and carbon emission performance looking ahead the chinese government should adopt measures to promote improvements in terms of energy efficiency and carbon emission performance in the short term

uncovering regulator s implicit social welfare weights under price cap regulation abstract this paper provides a simple procedure that can be used in empirical works aimed at uncovering the preferences of regulators over consumers the inverting procedure proposed by ross 1984 ross t w 1984 uncovering regulator s social welfare weights rand journal of economics 15 152 155 is adapted to a regulatory situation characterised by price cap regulation

gender earnings differentials in total pay base pay and contingent pay copyright by cornell university this is the publisher s version and is also electronically available from http ilr sagepub com content 47 4 634 abstract

empirical application of optimal commodity tax theory to taxation of alcoholic beverages this paper concerns the calculation of optimal taxes on commodities which contain a common externality generating component the first best solution is characterized by a form of marginal cost pricing with production costs increased according to the harm content of commodities valued at marginal external cost an application to finnish alcohol consumption data is made to indicate how the tradeoff between control and revenue requirements affects taxes by bootstrapping the estimates taxes are found to be less sensitive than compensated elasticities

the other side of the trade off the impact of risk on executive compensation the principal agent model of executive compensation is of central importance to the modern theory of the firm and corporate governance yet the exiting empirical evidence supporting it is quite wea

salaries and piece rates compensation can take many forms remuneration can come as pecuniary payments as fringes such as health and pension benefits or as a nonpecuniary reward such as plush office furniture that costs the firm less than it benefits the worker a significant literature has examined the trade offs between pecuniary and nonpecuniary compensation the modern work having been pioneered by rosen 1974 more recently another body of literature has examined the selection of method of total compensation ignoring the distinction between pecuniary and nonpecuniary payment this work has focused on risk and incentive factors it has resulted in comparisons of compensation based on absolute output levels to that based on relative performance it has also led to explorations of the relation of compensation to experience over the work life 2 little attention has been paid to what may be among the most important and obvious distinction in methods of compensation namely the choice between a fixed salary for some period of time that is paying on the basis of input and some workers receive compensation that is specified in advance and not directly contingent on performance instead it depends on an input measure such as hours worked for others compensation is directly related to output this essay is an attempt to predict a firm s choice of compensation method piece rates are defined more rigorously among the more important factors discussed are worker heterogeneity incentives sorting considerations monitoring costs and asymmetric information one result is that salary workers tend to be of lower quality and more homogeneous than are their piece rate counterparts numerous additional results are provided helpful comments by victoria lazear and yoram weiss are gratefully acknowledged support was provided by the department of labor and the national science foundation 1 see lazear and rosen 1981 stiglitz 1981 holmstrom 1982 green and stokey 1983 2 see lazear 1979 1981 and harris and holmstrom in press

the sales agent problem effort leisure allocation under performance pay as behavior towards risk the choice between safe and risky assets represents behavior towards risk more risk averse investors buy more safe assets we develop and test a general model that applies this intuition to the time allocation between risky effort and risk free leisure under linear incentives when risk increases with effort risk averse agents choose less effort but when risk is independent of effort effort choice is unaffected by risk preferences in many incentive contracts income risk is multiplicative with rather than additive to effort sales commissions being one example in such cases lower effort by the risk averse is a hitherto undocumented behavior towards risk jel c91 m52 j33

when does money make money more important survey and experimental evidence the authors investigate how the amount and source of income affects the importance placed on money using a longitudinal analysis of the british household panel survey and evidence from two laboratory experiments they found that larger amounts of money received for labor were associated with individuals placing greater importance on money but this effect did not hold for money not related to work the longitudinal survey analysis demonstrated these differential effects of the source of income on money s importance while holding constant stable individual differences the experiments provide causal evidence that the source of income has an effect on the importance of money as well as on the effort expended to earn more money the authors results suggest that even as individual differences in the importance placed on money may affect peoples income depending on its source income can also affect the importance people place on money

switching to carbon free production processes implications for carbon leakage and border carbon adjustment climate policy under partial global compliance raises concerns regarding carbon leakage while border carbon adjustment bca measures are a potential remedy they have also been criticised on various grounds this paper therefore investigates whether a policy fostering the switch to carbon free technologies can substitute for bcas a reason for the effectiveness of a targeted technology policy is that major leakage prone sectors such as iron and steel have two main sources of carbon emissions combustion of fossil fuels and industrial processes while combustion emissions can be reduced relatively easy by increasing energy efficiency reducing process emissions requires a switch to low carbon production processes e g in steel production by deploying electrolysis based on large scale solar electricity we show by means of a multi regional computable general equilibrium analysis that such a switch in steel production technology can eliminate a significant fraction of carbon leakage and also increase sectoral output and welfare since the necessary technologies are not available at large scale yet however are likely to be by 2020 a transitional bca scheme may be a crucial supportive instrument to foster such technology switches yet in the long run bca should be phased out to preserve the incentive for carbon free innovation

a unified framework for pro poor growth analysis starting with a general impact indicator as an evaluation criterion the author offers an integrative framework for a unified discussion of various concepts and measures of pro poor growth emerging from the current literature he shows that whether economic growth is considered pro poor depends fundamentally on the choice of evaluative weights in addition the author s framework leads to a new indicator of the rate of pro poor growth that can be interpreted as the equally distributed equivalent growth rate this is a distribution adjusted rate of growth that depends on the chosen level of inequality aversion illustrations based on data for indonesia in the 1990s show a strong link between growth and poverty reduction in that country a decomposition of the observed poverty outcomes reveals the extent to which changes in inequality have blunted the poverty impacts of both growth and contraction finally the results also demonstrate that absolute and relative indicators of pro poor growth can lead to conflicting conclusions from the same set of facts

dalton improving tax reform when households differ in ability and needs abstract in a previous paper we suggested a method for identifying tax reforms that adhere to dalton s principle of transfers approving a small enough transfer from rich to poor however even the weak requirement from that method namely prescribing a uni dimensional ordinal ranking of households by how deserving they are of a marginal income transfer is con fining here we extend the approach by formulating a two dimensional criterion for a dalton improving tax reform when there is social approval for transfers when other things are equal from the more able to the less able and from less needy households to more needy ones the possibility of applying this extended criterion in practice and a comparison with other criteria is carried out using the example of u k excise taxes

reconsidering pay dispersion s effect on the performance of interdependent work reconciling sorting and pay inequality pay dispersion in interdependent work settings is virtually universally argued to be detrimental to performance we contend however that these arguments often confound inequality with inequity t

how performance incentives shape individual exploration and exploitation evidence from microdata the existing literature has highlighted the role of individuals in exploration and exploitation yet our understanding of what shapes those activities at the individual level remains limited we integrate the literatures on exploration exploitation and incentives to examine how incentives impact individual behavior to explore new ideas or exploit existing ideas using novel microdata on the commercial projects of sales employees at a south korean e commerce firm we find that individuals engage in relatively more exploration when performance based incentives are weakened yet interestingly this increase in exploration is driven mainly by high performing individuals in our setting weakening performance based incentives also lead to higher exploration performance via experiential learning especially for individuals who work in complex task environments overall this study contributes to the literature on exploration exploitation by examining how individual exploration and exploitation behavior and performance is shaped by incentives we also contribute to the incentives literature by investigating the implications of incentives in an important domain namely that of knowledge exploration behavior this study also provides insights into important individual level microfoundations of firm capabilities and performance by highlighting the important role of individuals in exploration exploitation activities and how this role is contextualized by the incentives a firm deploys

are employee selection and incentive contracts complements or substitutes there is a debate in the literature as to whether employee selection is a substitute or complement to incentive contracting we argue that incentive contracts and selection can be both complements and substitutes conditional on the contracting difficulty faced by the firm we examine these control choices in a setting where contracting difficulties arise due to the firm s choice of strategy and from the volatility created by the firm s external environment we select a firm s commitment to organizational learning ol as our strategic choice variable as this provides a useful proxy for identifying settings where explicit incentive contracting is difficult the results show that as firms become increasingly committed to ol incentive contracts and employee selection operate as complements however with a high commitment to ol and an increasing level of external volatility contracting on performance measures will become less effective in this context our results indicate that there is a substitution effect toward employee selection

a tax programming model abstract this paper presents a new technique for analysing tax reform proposals the technique is general in the sense that it allows the user to choose the targets he thinks are the most important using this technique the israeli income tax reform of 1975 is evaluated

border adjustment for european emissions trading competitiveness and carbon leakage unilateral or sub global policies to combat climate change are potentially sensitive to free riding and carbon leakage one way of dealing with carbon leakage and competitiveness is the imposition of border adjustment measures for competing imports for example in the form of the obligation to importers of goods to purchase and surrender emissions allowances to the authorities when importing in this paper we explore some implications of border adjustment measures in the eu ets for sectors that might be subject to carbon leakage we examine the implications of two variants of these measures on the competitiveness of these sectors and on the global environment with the help of a multi sector multi region computable general equilibrium cge model of the global economy our calculations suggest that border adjustment might reduce the sectoral rate of leakage of the iron and steel industry rather forcefully but that the reduction would be less for the mineral products sector including cement the reduction of the overall or macro rate of leakage would be modest so from an environmental point of view border tax adjustments would not be a very effective policy measure but might mainly be justified by considerations of sectoral competitiveness

the effects of rising food prices on poverty in mexico we evaluate the impact of the rise in food prices during 2006 2008 on the poverty and extreme poverty rates in mexico we concentrate on the poor s consumption of staple foods and analyze the change in their consumption brought about by changed prices we also allow households receiving income from the farming and livestock sector to benefit from increases in prices of food products we find a modest increase in poverty using 2006 2007 prices however there is a daunting effect on the poor once the 2008 prices are taken into account after considering the positive effects of public policies announced in 2008 such as reduced taxes and tariffs on food products and greater subsidies to the extremely poor the poverty rate measured through consumption increases from 25 to 33 5 and the extreme poverty rate from 10 58 to 16 given the increase in food prices further analysis using the theory of optimal taxes suggests policies oriented towards relieving the food price pressure on the mexican poor should aim at lowering the prices of eggs vegetable oil milk and chicken

will carbon motivated border tax adjustments function as a threat abstract due to large incremental carbon emissions china might become an important target country of cbta carbon motivated border tax adjustments to levy cbta could reduce china s emissions meanwhile china s emissions reduction could also be achieved by china s climate policies termed as cbta emissions equivalent policies this paper contributes to the discussion on cbta by comparing the potential regional effects of cbta and cbta emissions equivalent policies the main findings are as follows 1 cbta and cbta emissions equivalent policies would result in relocations of outputs across regions and countries affect the structure of economy and contribute to world s emissions reduction 2 there would be significant differences in the regional effects between cbta and cbta emissions equivalent policies 3 compared to carbon tax cbta would be a costly and inefficient policy instrument to reduce emissions but could function as an effective coercion strategy 4 these policies would result in competitiveness issue and rebound effects wherein different countries would be affected differently china is a large economy and energy consumer with high openness to international trade looking ahead the chinese government should consider the potential interactions between china and other economies when designing tax reforms

endogenous incentive contracts and efficient coordination we examine the effects of endogenous assignment to incentive contracts on worker productivity assignment to high performance pay via a market mechanism is roughly twice as effective as imposing the same contract exogenously this positive effect is largely offset by a negative effect for workers that endogenously choose low performance pay we decompose the positive effect of endogenous assignment to high performance pay into effects due to selection and strategic anticipation and find that selection has a greater effect than strategic anticipation we use a reverse sort treatment to show that the effect of selection is sufficiently strong to overcome the direct effect of lower performance pay yielding coordination at high effort levels in spite of low incentives

analysis of the distributional impact of out of pocket health payments evidence from a public health insurance program for the poor in mexico many governments have health programs focused on improving health among the poor and these have an impact on out of pocket health payments made by individuals therefore one of the objectives of these programs is to reach the poorest and reduce their out of pocket expenditure in this paper we propose the distributional poverty impact approach to measure the poverty impact of out of pocket health payments of different health financing policies this approach is comparable to the impoverishment methodology proposed by wagstaff and van doorslaer 2003 that compares poverty indices before and after out of pocket health payments in order to escape the specification of a particular poverty index we use the marginal dominance approach that uses non intersecting curves and can rank poverty reducing health financing policies we present an empirical application of the out of pocket health payments for an innovative social financing policy implemented in mexico named seguro popular the paper finds evidence that seguro popular program has a better distributional poverty impact when families face illness when compared to other poverty reducing policies the empirical dominance approach uses data from mexico in 2006 and considers international poverty standards of 2 per person per day

a nonparametric analysis of insufficient wage incentives in the chinese health industry abstractthis study provides empirical results on the insufficient wage incentives in the chinese health industry which may result in the poor productivity of high ability medical personnel we fir

overconfidence and excess entry an experimental approach psychological studies show that most people are overconfident about their own relative abilities and unreasonably optimistic about their futures e g shelly e taylor and j d brown 1988 neil d weinstein 1980 when assessing their position in a distribution of peers on almost any positive trait like driving ability ola svenson 1981 income prospects or longevity a vast majority of people say they are above the average although of course only half can be if the trait is symmetrically distributed this paper explores whether optimistic biases could plausibly and predictably influence economic behavior in one particular setting entry into competitive games or markets many empirical studies show that most new businesses fail within a few years for example using plant level data from the u s census of manufacturers spanning 1963 1982 timothy dunne et al 1988 estimated that 61 5 percent of all entrants exited within five years and 79 6 percent exited within 10 years most of these exits are failures see also dunne et al 1989a 1989b d shapiro and r s khemani 1987

why are there large differences in performances when the same carbon emission reductions are achieved in different countries great interest has been in unilateral climate policies given present difficulty of establishing stable global coordinated agreements in this paper we investigate underlining factors explaining large differences in performances when the same carbon emission reductions are achieved in different abating countries to this end we develop a new multi country general equilibrium model incorporating six countries or world regions two goods six production inputs capital mobility energy mobility and international trade meanwhile we adopt two performance indicators with carbon leakage representing environmental efficiency and carbon emission abatement costs revealing cost effectiveness our findings are as follows firstly there are large differences in performances among these unilateral climate policies as evidenced by large differences in leakage rates and carbon emission abatement costs secondly the new global climate treaties to replace the kyoto protocol should be able to induce more carbon emission reductions in countries with low carbon emission reduction costs since such setting contributes to global cost savings finally developed countries have high carbon emission abatement costs compared with large developing countries china and india in this paper implying that there should be trade off mechanisms between efficiency and equity regarding how to allocate carbon emission reductions among countries

decomposition of s concentration curves for any given order of inverse stochastic dominance standard concentration curves are decomposed into three components called contribution curves those compo nents correspond to within group inequalities between group inequalities and transvari ational inequalities we prove for all orders that contribution curve dominance implies systematically welfare improving tax reforms and conversely accordingly as welfare ex pansions may be costly in terms of particular inequalities we propose targeted fiscal reforms jel classification d63 h20

poverty dominant program reforms the role of targeting and allocation rules we propose simple graphical methods to identify poverty reducing marginal reforms of transfer programs the methods are based on program dominance curves that display cumulative program benefits weighted by powers of poverty gaps these curves can be decomposed simply as sums of targeting dominance curves and allocation dominance ones and can serve to verify whether the assessment of marginal program reforms is sensitive to the choice of poverty lines and poverty measures as well as to differences across programs in revenue sources and incentive effects

efficiency wage models of unemployment keynesian economists hold it to be self evident that business cycles are characterized by involuntary unemployment but construction of a model of the cycle with involuntary unemployment faces the obvious difficulty of explaining why the labor market does not clear involuntarily unemployed people by definition want to work at less than the going wage rate why don t firms cut wages thereby increasing profits

measurement of income inequality experimental test by questionnaire abstract we reconsider some of the basic assumptions of the literature on inequality analysis students views on the meaning of inequality comparisons were elicited by means of a questionnaire involving both numerical and verbal questions the responses suggest that two important axioms the principle of transfers and decomposability are not universally accepted

preference reversals the impact of truth revealing monetary incentives researchers vigorously debate the impact of incentives in preference reversal experiments do incentives alter behavior and generate economically consistent choices lichtenstein and slovic 1971 document inconsistencies reversals in revealed preference in gamble pairs across paired choice and individual pricing tasks the observed pattern is inconsistent with stable underlying preferences expressed with simple errors lichtenstein and slovic 1973 and grether and plott 1979 introduce incentives but aggregate reversal rates change little these results fostered numerous replications and assertions that models of non stable preferences are required to explain reversals contrary to this research we find that incentives can generate more economically consistent behavior our reevaluation of existing experimental data shows that incentives have a clear impact by better aligning aggregate choices and prices the effect is sufficiently large that with truth revealing incentives a stable preferences with error model not only explains behavior but fits the data as well as any model possibly could

guidelines on searching for a dalton improving tax reform an illustration with data from indonesia this article documents the search for a dalton improving tax and expenditure reform using a methodology developed by yitzhaki and slemrod 1991 and mayshar and yitzhaki 1995 the methodology overcomes the need to define a specific social welfare function by searching instead for reforms that improve each social welfare function belonging to a wide class of functions the authors apply the method to the energy sector of indonesia ignoring distributional constraints and find that both the subsidy on kerosene and the tax on gasoline should be reduced but taking distributional concerns into account the present structure of energy taxes is reasonable and the country may benefit by increasing the subsidy to kerosene taxing electricity and reducing the gasoline tax these conclusions are robust to changes in the relevant parameters representing the indonesian economy

carbon control policies competitiveness and border tax adjustments abstract several propositions have recently been made to use border tax adjustments btas to address the loss of competitiveness induced by unilateral stringent domestic pollution control policies this paper explores in a general equilibrium framework the sectoral and welfare implications of a unilateral domestic ghg control policy combined with a bta scheme using the canadian economy as an illustration we assess the extent to which btas achieve their objectives and analyze the impacts of different methods of recycling the bta proceeds to support domestic industries our simulation results suggest that imposing btas on the imports of non fossil and energy intensive products reduces or removes completely the negative competitiveness impacts that domestic industries suffer from the use of the proceeds of the btas to support domestic energy intensive industries improves their competitiveness and more importantly in some cases overprotects them as it allows them to even increase their output in comparison to the benchmark without emissions control our results also shed light on the existence of heterogeneity in the composition of energy intensive industries as far as the recycling method of the bta proceeds is concerned energy intensive industries that are more oriented toward the domestic market are better off with the recycling of the bta proceeds towards gross output than towards exports alone finally abstracting from the environmental benefits of reduced emissions we find that a bta entails a higher welfare cost to households

team incentives and performance evidence from a retail chain in a field experiment with a retail chain 1 300 employees 193 shops randomly selected sales teams received a bonus the bonus increases both sales and number of customers dealt with by 3 percent each dollar spent on the bonus generates 3 80 in sales and 2 10 in profit wages increase by 2 2 percent while inequality rises only moderately the analysis suggests effort complementarities to be important and the effectiveness of peer pressure in overcoming free riding to be limited after rolling out the bonus treatment and control shops performance converge suggesting long term stability of the treatment effect

sorting and incentive effects of pay for performance an experimental investigation agency theory highlights losses in productivity that may occur when the interests of owners and employees are imperfectly aligned pay for performance has been proposed as a solution to this proble

self selection and the power of incentive schemes an experimental study we examine how self selection of workers depends on the power of incentive schemes and how it affects team performance if the power of the incentive schemes is increased in a laboratory experiment we let subjects choose between low powered team incentives and high powered individual incentives we observe that subjects exhibiting high trust or reciprocity in the trust game are more likely to choose team incentives when exposed to individual incentives subjects who chose team incentives perform worse if both the unobservable interdependency between their efforts and their incentive to cooperate under team incentives are high

comparing climate policies to reduce carbon emissions in china new huadu business school research fund national social science foundation of china 12zd059 shandong social science planning fund program 12djjj12 independent innovation foundation of shandong university iifsdu 2012gn038 ministry of education research of social sciences china postdoctoral science foundation 2013m530309

differential effects of incentive motivators on work performance in this field experiment we first compared the performance effects of money systematically administered through the organizational behavior modification o b mod model and routine pay for perfo

a numerical simulation analysis of hukou labour mobility restrictions in china abstract we use numerical simulation methods to analyze the hukou system of permanent registration in china which many believe has supported growing relative inequality over the last 20 years by restraining labour migration both between the countryside and urban areas and between regions and cities our aim is to inject economic modelling into the debate on sources of inequality in china which thus far has been largely statistical we first use a model with homogeneous labour in which wage inequality across various geographical divides in china is supported solely by quantity based migration restrictions urban rural areas rich poor regions eastern central and western non coastal zones eastern and central western development zones eastern central western zones more disaggregated 6 regional classifications and an all 31 provincial classification we calibrate this model to base case data and when we remove migration restrictions all wage and most income inequality disappears results from this model structure points to a significant role for hukou restrictions in supporting inequality in china we then present a further model extension in which urban house price rises retard rural urban migration the impacts of removing hukou restrictions on migration are smaller but are still significant finally we modify the model to capture labour productivity differences across regions calibrating the modified model to estimates of both national and regional gini coefficients removal of migration barriers is again inequality improving but less so