the measurement and trend of inequality comment in a recent article in this review morton paglin proposes a measure of concentration which he claims will correct the gini ratio for overstatement in populations where each individual may be expected to vary his income or wealth over his life cycle the paglin measure suggests that the gini ratio overstates income concentration in the united states by a third and does not reveal a 23 percent decline in concentration which has occurred between 1947 and 1972 these results are based on an improper decomposition of the gini ratio in this note i decompose the gini ratio to derive the paglin measure it is shown to correct for neither demographic nor life cycle income effects and to understate intracohort income or wealth inequality if properly normalized the paglin measure shows that the gini overstates u s income concentration by 7 percent or less and indicates a decline in u s interfamily income concentration of less than 12 percent four percentage points of this decline are the result of demographic change while less than 7 points comparable to the 5 percent decline of the gini are the result of decreased income concentration within cohorts of family heads decomposition further reveals major changes in the division of income among cohorts and in concentration of income within cohorts these changes compensate each other in the paglin measure the use of which as a measure of income or wealth concentration is not recommended the gini concentration ratio

the impossibility of a desirable minimal state the amount of control the general public exerts over government depends on accepted government procedures as determined by the political constitution and prevailing public opinion it has not been the purpose of this paper to suggest ways of providing the public more control over government but to consider some implications of changes in that control it is obvious that it would be desirable for the general public to have more control over political decisions i e for the political process to be more responsive to the broad based benefits and costs that result from government action the question is what does more public control over government imply about the desirable size of government for the natural rights advocate the answer is nothing government should be only large enough to protect citizens against force and fraud the purpose of the present paper however has been to argue that the desirable size of government can be either positively or negatively related to the control exerted over it by the public if this argument is accepted it casts doubt on the possibility of a desirable minimum state

the interaction of taxes and inflation in a macroeconomic model this paper presents a closed economy macroeconomic model in which the nominal income of some assets is taxed whereas that of others is not the short run and long run implications of a change in expected inflation are examined an increase in the expected rate of inflation shifts the composition of aggregate demand since asset holders shift their portfolios from the taxed asset corporate capital to the untaxed asset consumer durables in the long run this shift implies a stock adjustment decline in capital with a consequent decrease in the rate of growth of productivity over the transition period

the local structure of the welfare state uneven effects of social spending on poverty within countries research has shown that there is a strong negative relationship between social spending and poverty levels among urban inequality researchers it is often assumed that compared with the usa the welfare state has mitigated social differences explaining lower levels of urban inequality in most european countries however research on the role of the welfare state is often conducted on the national level and is thus unable to draw conclusions on the effects of social spending and redistribution on a lower level failing to take the within country variation into account this study connects welfare state research to urban inequality research by investigating the effects of social spending on poverty in urban and non urban areas we have conducted a cross national multilevel logistic regression analysis using eurostat and european social survey data of 2008 our findings suggest that the effects of social spending are unequally distributed within countries

a model of rental and owner occupied housing abstract a complete model of owner occupied and rental housing is developed the model allows for the endogenous determination of rents the user cost of owner occupied housing and housing tenure choice by individuals in the short run structure prices are endogenous while in the long run the size of the housing stock adjusts to equate structure prices to exogenous construction costs comparative static results emphasize the importance of marginal tax rates and distinguishing between the short and long run for a complete understanding of the impacts of inflation on housing markets

the measurement of rationing and the treatment of structural change in the uk mortgage market uk mortgage markets have undergone major structural changes in the past few years resulting in mortgages no longer being rationed the ending of rationing has implications for the specification of empirical models of housing demand housing models have never adequately resolved how to incorporate unobservable mortgage rationing conventional proxy methods are particularly unsuitable when rationing ceases in this paper we propose a new way of measuring rationing directly which incorporates regime switching the model of rationing is extensively tested and estimates of rationing for the period 1963 1988 are provided these may be easily incorporated into housing demand studies

a single item continuous review inventory problem with space restriction abstract with today s high cost of land acquisition observed in most countries management can no longer afford large storage facilities to house their products for this reason one of the main concerns of inventory managers is to ensure that enough storage space is available upon the delivery of a product they therefore have to determine the least cost ordering policy so as to meet demand and taking into account the space limitation in this paper we investigate the problem of a single item continuous review inventory problem in the presence of a space restriction when the demand is stochastic through a sensitivity analysis study it is found that ordering cost storage capacity average demand per unit time and holding cost rate are the most influential problem parameters on the expected inventory costs it is also shown numerically that a simple solution based on economic order quantity is performing very well with an average and maximum cost penalty of 0 19 and 2 03 respectively

a measure of horizontal inequity politicians academicians and the general public alike have perceived that the status quo tax and transfer legislation creates inequities among living units tax laws create numerous situations in which living units with seemingly equal abilities to pay are taxed quite different amounts state by state differences in welfare eligibility rules benefit schedules and administrative procedures the general unavailability of cash welfare to childless nonaged healthy couples and single individuals and other features of transfer programs similarly provide vastly different levels of income support to units with equal needs advocates of major tax and welfare reform have marshalled such evidence into a central argument in favor of their proposals while there is wide agreement that the process of redistributing incomes abounds with inequities there have been few attempts to quantify their extent 2 this paper develops a measure of horizontal inequity and illustrates its use section ii discusses the concept of horizontal equity then builds upon familiar lorenz curve gini coefficient analysis to derive the inequity index the third part considers some problems of implementing the measure and illustrates it section iv provides a short conclusion

tax subsidies to owner occupied housing an asset market approach inflation reduces the effective cost of homeownership and raises the tax subsidy to owner occupation this paper presents an asset market model of the housing market and estimates how changes in the expected inflation rate affect the real price of houses and the equilibrium size of the housing capital stock simulation results suggest that the accelerating inflation of the 1970s which substantially reduced homeowners user costs could have accounted for as much as a 30 percent increase in real house prices persistent high inflation rates could lead ultimately to a sizable increase in the stock of owner occupied housing

the tradeoff between equality and efficiency short run politics and long run realities in concluding this paper the best way to emphasize what has been argued is to make as clear as possible what has not been argued nothing in the above argumentation or evidence can or is intended to deny that some social welfare programs genuinely serve the long run interests of the poor undoubtedly such programs exist and can be identified as successful other programs exist however that are undeniably making the poor worse off from the perspective of reducing income inequality it is obvious that the successful programs should be maintained and even expanded in ways that further assist the poor while the harmful programs should be terminated unfortunately it is simply not possible politically to select out those programs that do promote broad social goals such as reducing poverty while eliminating those programs that do not this is a point that the present paper is intended to emphasize once you open up the political transfer process to one group no matter how deserving that group may be economic rents are generated that will motivate competition among politically organized interest groups the inevitable result of this competition is a package of programs that serve a variety of interests but which on balance do little if anything to benefit those groups which it was our intention to assist

how income transfer programs affect work savings and the income distribution a critical review for helpful comments on earlier drafts we thank without implicating moses abramovitz yves balcer john bishop alan blinder richard burkhauser michael darby irwin garfinkel alan gustman daniel hamermesh martin holmer george jakubson robert lampman paul menchik robert moffitt michael murray joseph quinn timothy smeeding eugene smolensky barbara wolfe and two anonymous referees

new supply and price dynamics in the singapore housing market in this paper var models are employed to trace the price response of existing houses to the quantity of new units launched by homebuilders in singapore between 1996 and 2009 contrary to the competition hypothesis prediction of a negative reaction it is found that marginal supply granger cause existing house prices in a positive manner the effect is robust to the inclusion of exogenous demand factors as well as price interaction in the primary new houses and secondary existing houses market segments the contagion effect is consistent with the hypothesis that developers due to their ability to predict the market are price leaders in the housing market it is also found that homebuilders exhibit herding behaviour in mimicking each other s timing on when to market their new residential projects

modelling uk house prices using cointegration an application of the johansen technique this paper provides an econometric analysis of the long term equilibrium determination of uk house prices using the relatively recent johansen cointegration procedure this long term equilibrium specification is then utilized in order to estimate a parsimonious dynamic model for uk house prices

a multi product continuous review inventory system with stochastic demand backorders and a budget constraint abstract common characteristics of inventory systems include uncertain demand and restrictions such as budgetary or storage space constraints several authors have examined budget constrained multi item stochastic inventory systems controlled by continuous review policies without considering marginal shortage costs existing models assume that purchasing costs are paid at the time an order is placed which is not always the case since in some systems purchasing costs are paid when orders arrive in the latter case the maximum investment in inventory is random since the inventory level when an order arrives is a random variable hence payment of purchasing costs on delivery yields a stochastic budget constraint for inventory this paper models a multi item stochastic inventory system with backordered shortages when estimation of marginal backorder cost is available and payment is due upon order arrival the budget constraint can easily be converted into a storage constraint

the allocation of capital between residential and nonresidential uses taxes inflation and capital market constraints we have constructed a simple two sector model of the demand for housing and corporate capital economic growth and an increase in the inflation rate were then simulated with a number of model variants the model and simulation experiments illustrate both the tax bias in favor of housing and the manner in which the increase in inflation between 1965 and 1978 magnified it the existence of capital market constraints offsets the bias against corporate capital but it introduces a sharp inefficient reallocation of housing from less wealthy constrained households to wealthy households who do not have gains on mortgages and are not financially constrained

the dynamics of the singapore private housing market in this paper a dynamic stock flow model is modified and applied to the singapore private housing market two empirical models are then constructed which offer an explanation for the dynamic patterns of both real private housing prices and new housing construction in the long run movements in the real gdp per capita and the total housing stock are found to have significant impacts on real housing prices while the user cost the public resale housing prices and the autocorrelation of housing prices with one lag explain most of the short run dynamics of real housing prices on the supply side the long run price elasticity of new housing construction is 1 31 it is also found that long run new housing construction drops 6 5 per cent for every 1 per cent increase in the total housing stock

female labor supply with a discontinuous nonconvex budget constraint incorporation of a part time full time wage differential this paper incorporates the well documented part time full time wage differential into an empirical labor supply model with both a heterogeneity and a random error term and estimates that model fo

inventory control with an exponential utility criterion a base stock policy is shown to be optimal when a dynamic version of the news vendor model is optimized with respect to an exponential utility criterion

aggregate constrained inventory systems with independent multi product demand control practices and theoretical limitations in practice inventory managers are often confronted with a need to consider one or more aggregate constraints these aggregate constraints result from available workspace workforce maximum investment or target service level we consider independent multi item inventory problems with aggregate constraints and one of the following characteristics deterministic leadtime demand newsvendor basestock policy rq policy and ss policy we analyze some recent relevant references and investigate the considered versions of the problem the proposed model formulations and the algorithmic approaches finally we highlight the limitations from a practical viewpoint for these models and point out some possible direction for future improvements

uncertain lifetime consumption and dissaving in retirement this paper asks whether the continued accumulation or mild dissaving observed among the retired can be explained by uncertain lifetime in the absence of annuities after an initial period influenced by borrowing constraints under constant relative risk aversion uncertain lifetime depresses consumption by a proportion increasing with age if the elasticity of intertemporal substitution in consumption is small illustrative computations based on actual income and survival data show that plausible elasticities are sufficiently small to give this effect the reduction in consumption is large enough to explain much of the lack of decumulation by the elderly

taxation inflation and the terms of trade abstract the interaction between changes in the rate of inflation and tax systems can have potential terms of trade effects an open economy macroeconomic model is presented in which such effects are analyzed the asset menu consists of money corporate capital whose nominal income is subject to taxation and consumer durables whose return is tax exempt this may be contrasted with the conventional menu of money and capital and or bonds durables are imported an increase in the rate of inflation then implies that the terms of trade of the country in question deteriorates in the long run

the trade off between equality and efficiency this paper uses a 1976 microdata base to estimate the marginal cost of reducing income inequality with a policy that has distributional effects similar to the present tax transfer system the analysis uses a simulation methodology in which only the labor supply effects are evaluated other behavioral effects are ignored the most striking finding is that marginal cost is quite high even for modest labor supply elasticities for example in the benchmark case with a weighted average economy wide uncompensated wage elasticity of 0 2 and compensated elasticity of 0 31 the disposable money income of upper income quintiles of households is depressed by 9 51 for each dollar increase in the disposable money income of lower income quintiles when income equivalent values that take account of the value of leisure are compared the marginal cost for this case is estimated to be 3 49