the rotten kid theorem meets the samaritan s dilemma a familiar result in the economic theory of the family is becker s rotten kid theorem this theorem states that altruism by a family member will lead other selfish members to act efficiently from the family viewpoint we extend becker s one period model to two periods and show that parental altruism can result in an inefficiency known in other contexts as the samaritan s dilemma implications of this for transfer arrangements within the family and for the ricardian equivalence theorem are drawn

beyond gdp the quest for a measure of social welfare this paper critically examines the various approaches to the measurement of individual well being and social welfare that have been considered for the construction of alternatives to gdp special attention is devoted to recent developments in the analysis of sustainability in the study of happiness in the theory of social choice and fair allocation and in the capability approach it is suggested in the conclusion that although convergence toward a consensual approach is not impossible for the moment not one but three alternatives to gdp are worth developing jel i31 e23 e01

welfare effects of distortionary fringe benefits taxation the case of employer provided cars in europe many employees receive company cars as fringe benefits induced by taxation we analyze the welfare effects of company car taxation for the netherlands by estimating to what extent car expenditure and private car travel change when employees receive a company car tax treatment of company cars generates an annual welfare loss ranging from 600 to 780 per company car mainly due to a shift toward more expensive cars from 420 to 600 but also due to increased private travel 180 for the whole of europe the annual welfare loss is about 12 billion 2011 by the economics department of the university of pennsylvania and the osaka university institute of social and economic research association

commuting transport tax reform and the labour market employer paid parking and the relative efficiency of revenue recycling instruments in this paper the welfare effects of a budget neutral increase in taxes on car commuters are studied in a model that takes into account the presence of employer paid parking at the workplace it is found that the presence of employer paid parking substantially increases the welfare effect of such a tax reform independent of the use of the revenues congestion taxes not only correct congestion externalities they also reduce the inefficiency caused by employer paid parking moreover different congestion effects of alternative recycling instruments and the presence of employer paid parking jointly imply that recycling the tax revenues via higher public transport subsidies may yield much more favourable welfare effects than previously believed it can easily outperform recycling the tax revenues via lower labour taxes finally cashing out parking costs to public transport users is found to generate substantial positive welfare effects numerical analysis confirms the theory

the drawbacks and opportunities of carbon charges in metropolitan areas a spatial general equilibrium approach in cities there is a variety of economic and spatial forces that may influence to what extent a travel related co2 emission pricing can be an effective instrument to contribute to the achievement of co2 reduction goals therefore we examine the effectiveness and impact of co2 emission charges using a spatial general equilibrium model of an urban economy calibrated according to an average german city our analyses suggest that the imposition of a pigouvian type co2 emission charge on urban passenger travel may be able to reduce emissions by about 1 11 depending on the estimated social damage cost of carbon dioxide such a policy increases urban welfare mainly on account of a reduction of congestion costs however pricing congestion directly not only provides higher urban welfare but also higher emission reductions pricing congestion and co2 emissions simultaneously allows to achieve a wide range of emission reduction goals if however the reduction goal is very ambitious the emission charge must be raised to higher levels then distortions in the urban markets and in spatial travel decisions lower labor supply and thus urban production income of city residents federal tax revenue income of landowners outside the city all together implying losses in welfare

borrowing constraints human capital accumulation and growth abstract borrowing constraints increase aggregate savings and therefore may increase growth this paper argues however that by reducing human capital accumulation borrowing constraints also have negative effects on growth these effects are discussed in an overlapping generations model with endogenous growth empirical evidence for oecd and developing countries lend support to the main predictions of the model

private transfers borrowing constraints and the timing of homeownership the 1991 italian survey of household income and wealth contains retrospective information on intergenerational transfers this information is used to estimate the impact of transfers on the saving time required to purchase a house it is found that transfers have a small impact on saving time and that after receiving a transfer households purchase considerably larger homes the results have implications for the debate about the source of the relation between aggregate saving and growth

finite lifetimes and the effects of budget deficits on national saving abstract even though realistic deficit policies shift sizable tax burdens to future generations the assumption of an infinite horizon is a good approximation for analyzing a deficit s short run saving effect on individuals who are neither liquidity constrained nor myopic recent u s experience casts significant doubt on these assumptions however and appears difficult to reconcile with the ricardian equivalence proposition that the timing of taxes does not affect national saving recent deficits have coincided with reduced national saving and a substantial increase in the share of gnp devoted to consumption

the marginal welfare cost of public funds theory and estimates abstract we derive a general analytic formula for the marginal welfare cost mwc of public funds without imposing restrictive assumptions on preferences or technologies the framework encompasses the various special cases previously considered and reconciles the disparities among the reported estimates of mwc unresolved differences in existing estimates are fully explained by appropriate interpretations of intended thought experiments and alternative assumptions about the elasticity of labor supply with respect to public spending further progress in measuring mwc requires empirical estimation of labor supply functions that include government spending as an explanatory variable

second best congestion pricing schemes in the monocentric city abstract this paper considers second best congestion pricing in the monocentric city with endogenous residential density and endogenous labour supply a spatial general equilibrium model is developed that allows consideration of the three way interactions between urban density traffic congestion and labour supply congestion pricing schemes are analysed that are second best by design and not because distortions exist elsewhere in the spatial economy like cordon charging and flat kilometre charges both for cobb douglas utility and for ces utility the analyses suggest that the relative welfare losses from second best pricing compared to first best pricing are surprisingly small

intergenerational transfers and liquidity constraints a growing body of evidence indicates that liquidity constraints could affect a substantial proportion of u s consumers but little is known about why these constraints might exist an important but little explored issue is the relationship between inter vivos intergenerational transfers and liquidity constraints these transfers can ease borrowing constraints empirical transfer patterns match those predicted from a model in which transfers are allocated to liquidity constrained consumers in particular the distinction between current and permanent incomes of potential recipients is a key aspect of private transfer behavior the findings have important implications for our understanding of consumer behavior

a neglected welfare cost of monopoly and most other product market distortions abstract a neglected effect of monopoly is the distortion in the quantity of resources supplied monopoly not only affects the economy s output mix it also results in factor prices that are below social marginal value products this latter distortion is shown to be quantitatively important when other policies such as taxes on labor earnings also depress factor prices under plausible conditions the welfare cost due to this distortion of monopoly is shown to be between five and fifteen times larger than the more familiar harberger triangle output mix distortion of monopoly it is suggested that the resource supply effects of many other policies are similarly likely to be more important than their commonly evaluated output market effects

trade liberalization and environmental taxation in federal systems the literature on trade liberalization and environment has not yet considered federal structures in this paper we show how the design of environmental policy in a federal system has implications for the effects of trade reform trade liberalization leads to a decline in pollution taxes regardless of whether pollution taxes are set at the federal centralized or local decentralized level and it increases social welfare the effect under a decentralized system is smaller than if these taxes are set by the federal government and pollution emissions therefore decline in this case moreover majority bias interacts with trade liberalization if federal taxes are used

road transport externalities during the last decade much progress has been made in defining measuring the external costs of transport as the cost of tolling equipment falls the set of realistic policy options to internalise these externalities will continue to grow this will determine the research and policy agenda we make three points firstly empirical work is still necessary to better identify marginal external costs including congestion accident and environmental costs secondly any assessment of policy options should treat externalities simultaneously the use of pricing instruments and emissions standards are discussed within this framework thirdly we emphasise the role of government designing the optimal road pricing institutions requires consideration of horizontal and vertical tax competition while double dividend arguments are central to the question of securing public support

pricing and congestion economic principles relevant to pricing roads u k expenditures on roads or road costs average l4 34 billion per year from the 24 6 million vehicles registered road taxes of l12 7 billion were collected 2 9 times road costs from 1978 88 the average daily traffic on each km of road rose by 34 percent with a consequent serious increase in congestion road space is a valuable and scarce resource and road users should logically pay the marginal social cost if they are to make efficient transport and location decisions the paper estimates these costs and the appropriate charges for britain and identifies the major policy issues total road charges ignoring hard to quantify accident costs should yield l13 8 billion of which congestion charges would be l12 8 billion though close to road taxes in total amount replacing current taxes by road pricing would reduce congestion improve public transport and avoid perverse consequences from road expansion copyright 1990 by oxford university press

is everything neutral in his well known analysis of the national debt robert barro introduced the notion of a dynastic family this notion has since become a standard research tool particularly in the areas of public finance and macroeconomics in this paper we critique the assumptions on which the dynastic model is predicated and argue that this framework is not a suitable abstraction in contexts in which the objective is to analyze the effects of public policies we reach this conclusion by formally considering a world in which each generation consists of a large number of distinct individuals as opposed to one representative individual we point out that family linkages form complex networks in which each individual may belong to many dynastic groupings the resulting proliferation of linkages between families gives rise to a host of neutrality results including the irrelevance of all public redistributions distortionary taxes and prices since these results are not at all descriptive of the real world we conclude

operative gift and bequest motives the ricardian equivalence theorem which is the proposition that changes in the timing of lump sum taxes have no effect on assumption or capital accumulation depends on the exist of operative altruistic motives for intergenerational transfers these transfers can be bequests from parents to children or gifts from children to parents in order for the ricardian equivalence theorem to hold one of these transfer motives must be operative in the sense that the level of the transfer is not determined by a corner solution resulting from a binding non negativity constraint this paper derives conditions that determine whether the bequest motive will be operative the gift motive will be operative or neither motive will be operative in a model in which consumers are altruistic toward their parents and their children this abstract was borrowed from another version of this item

ricardian equivalence revisited deficits gifts and bequests barro 1974 shows that operative altruistic transfer motives are key for ricardian equivalence to hold this paper evaluates the importance of this mechanism quantitatively by studying deficit financed tax cut experiments i use a heterogeneous agents overlapping generations economy with endogenously operative transfer motives to capture the fact that empirically transfers occur in some but not in all families altruism is calibrated to match aggregate transfer statistics i find that the response of aggregate consumption to a tax cut is in the ballpark of a standard overlapping generations economy that is an economy without altruistic family links welfare implications of this economy however move closer to a dynastic economy

long run equilibria with borrowing constraints and altruism this paper adapts a nonstochastic overlapping generations model to include liquidity constraints and intergenerational altruism existing work indicates the importance of both but often considers them separately this paper studies their interactions first it shows that they tend to conflict the model only admits stationary equilibria with dynastic wealth accumulation but no binding liquidity constraints or wity binding constraints but no dynastic accumulation second it examines the latter type of equilibrium closely if liquidity constraints bind quantitative examples imply that consequent utility losses may be small and that economywide wealth accumulation tends to be unrealistically low

borrowing constraints and two sided altruism with an application to social security abstract we develop the implications of borrowing constraints and two sided altruism in an overlapping generations framework with agents who live three periods our analysis identifies six equilibrium patterns of intertemporal and intergenerational linkages in the no loan economy one of which corresponds to the traditional life cycle model and one of which corresponds to barro s dynastic model novel linkage patterns involve parent to child transfers early in the life cycle child to parent gifts late in the life cycle or both capital accumulation behavior and the consequences of fiscal policy interventions depend often critically on which linkage pattern prevails we show for example how unfunded social security interventions can significantly depress aggregate capital accumulation even when every generation is linked to its successor generation by altruistic transfers we also derive a non ricardian neutrality result for gift motive economies that holds whether or not borrowing constraints bind and whether or not parent and child are connected by an operative altruism motive at all points in the life cycle

optimal taxation of car ownership car use and public transport insights derived from a discrete choice numerical optimization model in this paper we study the taxation of car ownership car use and public transport in the presence of externalities within the framework of a discrete continuous choice model we first derive optimal taxes in a simplified setting emphasizing the specific role of fixed car ownership taxes and the relevance of public transport demand by non car owners for the optimal tax structure a numerical optimisation model is then constructed to study welfareoptimal public transport fares and two part tariffs on ownership and use of gasoline and diesel cars in belgium results are as follows first we find that the current differences in tax treatment between diesel and gasoline car ownership and use cannot be justified on the basis of external cost and budgetary considerations efficient pricing requires substantial increases in the relative user tax on diesel cars as compared to gasoline cars optimal fixed taxes are substantially below current levels and only marginally differ between car fuel types second if for political or technical reasons variable car taxes cannot be optimally adjusted large differences in fixed car taxes do result the same holds if the government uses kilometre taxes as the main variable tax instrument third the results of a series of marginal tax reform exercises suggest that a shift form gasoline towards diesel taxation is welfare improving both for fixed and variable taxes somewhat surprisingly a shift from fixed towards variable taxes is not necessarily welfare improving it is for diesel but not for gasoline cars

optimal timing of farm transferal from parent to child when farm income is first increasing and then decreasing in the operator s age the timing of farm transferal from parent to child is optimally determined by families who seek to maximize joint income or utility using a sample of israeli farms in which the operation of the farm changed from parent to child between 1971 and 1981 equations of transfer time and child s education are derived a simultaneous equation censored regression model is estimated using a two stage method results support the theoretical predictions that transfer time is decreasing with parent s age and with child s schooling and increasing with parent s experience

on revenue recycling and the welfare effects of second best congestion pricing in a monocentric city abstract this paper examines congestion taxes in a monocentric city with pre existing labor taxation when road toll revenue is used to finance labor tax cuts 35 of the optimal road tax in our numerical model does not reflect marginal external congestion costs but rather functions as a ramsey mirrlees tax i e an efficiency enhancing mechanism allowing for an indirect spatial differentiation of the labor tax this adds a quite different motivation to road pricing since welfare gains can be produced even in absence of congestion we find that the optimal road tax is non monotonic across space reflecting the different impacts of labor supply elasticity and marginal utility of income which both vary over space the relative efficiencies of some archetype second best pricing schemes cordon toll flat kilometer tax are high 84 and 70 respectively when road toll revenue is recycled lump sum the optimal toll lies below its pigouvian level extensions in a bimodal framework show that the optimality of using road toll revenue to subsidize public transport depends on the initial inefficiency in public transport pricing

intergenerational transfers and capital market imperfections evidence from a cross section of italian households abstract we investigate whether a system of family finance exists and to what extent it is able to offset capital market imperfections a simple model of intergenerational transfers implies that the probability of a liquidity constrained consumer receiving a transfer is negatively correlated with his current endowment and positively correlated with his future resources we test this proposition using a recent survey of italian households in which both transfer recipients and liquidity constrained households are readily observable the results indicate that private transfers help to ease borrowing constraints however a substantial number of liquidity constrained households remain after transfers have been made

do private income transfers increase labor market risk abstract in a two stage model of private income transfers with a labor market we find that the aggregate effect of such transfers induces labor market responses to the increase in moral hazard thereby increasing the volatility of wages and lowering welfare the equilibrium level of transfers exceeds the socially optimum level

random earnings differences lifetime liquidity constraints and altruistic intergenerational transfers abstract this paper develops a model of private savings behavior in which households care about their descendants cannot have negative net worth and have lifetime earnings depending on random draws from an exogenous distribution of abilities the elements interact very lucky parents are likely to leave large estates constrained children are unusually likely to receive intergenerational transfers the paper proves the existence of a stationary cross sectional distribution of wealth endogenously determines where liquidity constraints will bind and shows that the long term interest rate must be such that ricardian neutrality fails its last section generates several illustrative numerical simulations

second best congestion pricing the case of an untolled alternative abstract this paper deals with second best one route congestion pricing in case of an untolled alternative using a two link network simulation model the effects of various demand and cost parameters on the relative efficiency of one route tolling are analyzed it is investigated whether the existence of costs of congestion charging may be a reason for one route tolling to be more overall efficient than two route tolling finally the efficiency of revenue maximizing one route and two route tolling is discussed

on the marginal welfare cost of taxation this paper develops a rigorous partial equilibrium analysis of the determinants of margin al welfare cost mwc of taxes on labor earnings it shows that four key parameters interact to determine the magnitude of mwc using aggregate data and plausible ranges of values for the parameters mwc can vary from under 10 percent to more than 300 percent of marginal tax revenue intermediate parameter values sugge st mwc is in the 25 50 percent range however the more extreme estimates cannot be ruled out on the basis of available evidence suggesting that mwc cannot yet be copyright 1987 by american economic association

optimal tax and public investment rules for congestion type of externalities optimal government policy is considered in a second best framework where consumers and producers cause an externality of the congestion type and income distribution issues are taken into account the theoretical results of the optimal tax literature are adapted using the concept of the net social pigouvian tax an illustrative age model uncovers the relative importance of its components the model demonstrates that the level of the externality tax does not depend strongly on distribution concerns as reoptimization of the other taxes ensures that the income distribution objective is reached the model also allows us to study the interaction between externality taxes and public abatement

optimal policies in cities with congestion and agglomeration externalities congestion tolls labor subsidies and place based strategies abstract this paper develops a spatial general equilibrium model that accommodates both congestion and agglomeration externalities while firms and households land use decisions are endogenous across continuous space focusing on the interaction between externalities and land use patterns we examine the efficiencies of first best policies and second best pricing and place based strategies using numerical simulations a first best policy must combine both pigouvian congestion tolling pct and pigouvian labor subsidies pls instruments or design an optimal toll or subsidy internalizing agglomeration externalities or congestion externalities we also examine second best pricing policies if only one instrument is adopted congestion pricing policies alone e g a partial pct or a flat rate toll can improve social welfare only in heavy congestion cities and their welfare gains may be insignificant e g below 10 of the welfare improvement achieved by first best policies in contrast second best labor subsidy policies alone are a more effective alternative to first best policies as to place based policies the firm cluster zoning fcz regulation is more efficient than the urban growth boundary ugb policy ugbs only have small effects on the agglomeration economy but could worsen land market distortions via residential rent escalation effects these findings suggest that it is important to internalize business land use decisions and relax monocentricity assumptions in order to appreciate the interplay of both urban externalities since spatial adaptations to policy interventions can distort system efficiencies

does britain or the united states have the right gasoline tax this paper develops an analytical framework to assess the second best optimal level of gasoline taxation taking into account unpriced pollution congestion and accident externalities as well as interactions with the broader fiscal system we provide calculations of the optimal taxes for the us and the uk under a variety of parameter scenarios under our central parameter values the second best optimal gasoline tax is 1 01 gal for the us and 1 34 gal for the uk current tax rates are much lower than this in the us and higher in the uk the calculations are moderately sensitive to alternative parameter assumptions the congestion externality is the largest component in both nations revenue raising needs also play a significant role as do accident externalities and local air pollution potential welfare gains from reducing the current uk tax rate are estimated at nearly one fourth the production cost of all gasoline used in the uk even larger gains could be achieved by switching to a tax on vehicle miles with equal revenue yield for the us the welfare gains from optimizing the gasoline tax are smaller but those from switching to an optimal tax on vehicle miles are very large

conceptual developments in the economics of transportation an interpretive survey the objective in this paper is to survey the literature in transportation economics exploring two basic themes first the conceptual developments in the analysis of supply and demand which recognizes noteworthy aggregation biases in the empirical work on aggregate data and indicate that a correct analysis of the issues should take place at a highly disaggregated level second the use of these conceptual developments to evaluate efficiency aspects of transportation pricing investment and the impact of government regulation on resource allocation and distribution in the transportation sector it is important to acknowledge that the survey is based on research throughout the world but our institutional perspective and to some extent the topics that are covered is based largely on the u s experience author

comparing the efficiency of alternative policies for reducing traffic congestion abstract this paper compares the efficiency of a single lane toll a uniform congestion tax across freeway lanes a gasoline tax and a transit fare subsidy at reducing congestion there are three conditions for an efficient outcome relating to travel across modes across peak and off peak periods and sorting out drivers with high and low time costs across faster and slower freeway lanes each policy involves some inefficiency indeed the single lane toll gasoline tax and transit subsidy forego at least two thirds of the efficiency gains under an ideal congestion tax that varies across lanes however the uniform congestion tax achieves over 90 of these gains

ricardian equivalence long run leviathan abstract this paper presents a heterogenous overlapping generations with altruism model in which intergenerational discounting is stochastic the model nests three popular macroeconomics models those of ramsey economic journal 38 152 1928 543 559 diamond american economic review 55 1965 1126 1150 and a variant of the blanchard journal of political economy 93 2 1985 223 247 buiter the economic journal 98 391 1988 279 293 weil journal of public economics 38 2 1989 183 198 model it is shown that under a mild condition originally derived by weil journal of monetary economics 19 3 1987 377 391 the long run capital intensity is robust to practically every popular theoretical criticism of the standard ricardian model these criticisms include the imperfect inheritability of time preference parameters and hence finite horizons on the part of all households myopia in the form of overly discounting the future borrowing constraints distortionary labor taxation exchange strategic bequest motives common cultural constraints egalitarian bequests and primogeniture endogenous fertility and joy of giving while precautionary saving can theoretically violate long run neutrality the asymptotic capital intensity is still bounded below by preference parameters the overall conclusions are sharply at odds with those found in most articles dealing with the theoretical foundations of ricardian equivalence

the welfare effects of environmental taxation recent literature has investigated whether the welfare gains from environmental taxation are larger or smaller in a second best setting than in a first best setting this question has mainly been addressed indirectly by asking whether the second best optimal environmental tax is higher or lower than the first best pigouvian rate even this indirect question has itself been approached indirectly comparing the second best optimal environmental tax to a proxy for its first best value marginal social damage msd on closer examination however msd becomes ambiguously defined and variable in a second best setting making it an unreliable proxy for the pigouvian rate given these observations the current analysis reevaluates these welfare questions and finds that when compared directly to its first best value the second best optimal environmental tax generally rises with increased revenue requirements even in cases where the second best environmental tax is lower than its first best value the welfare gains may be greater than in a first best setting these results suggest that the marginal fiscal benefit revenue recycling effect exceeds the marginal fiscal cost tax base effect over a range of environmental tax rates that for benchmark models extends above the first best pigouvian rate these findings reinforce the intuition that environmental policy complements rather than competes with the provision of other public goods

potential of and constraints to the rice green revolution in mozambique a case study of the chokwe irrigation scheme abstract this paper investigates the potential of and constraints to a lowland rice green revolution in mozambique using data from an agro climatically favorable area the chokwe irrigation scheme our data show that although the potential is high the insufficient supply of irrigation water excessively expensive chemical fertilizer and moderately costly labor hinder the scheme from achieving that potential first of all an improvement in irrigation is crucial as it increases yield not only directly but also indirectly through its complementary relationship to chemical fertilizer we also find that an improvement in credit access is important as it can increase the application of chemical fertilizer and labor by making the acquisition of these expensive inputs through markets possible the unavailability of hired and exchange labor during peak seasons is another constraint to the intensive use of labor the introduction of rice varieties with a shorter maturity duration would relax the timing of transplanting and thus spread out the peak seasons labor demand

optimal timing in the problem of family farm transfer from parent to child an option value approach abstract the optimal time for transferring the family farm from parent to child is modeled in an option value framework it is assumed that parents have the ability to wait and enrich their information set before making the decision when to transfer the farm to a succeeding child rather than making a prompt decision the results indicate that the optimal timing depends on the wedge between the parents critical level of utility and disutility from the farm transfer to a succeeding child the arguments of parents utility function are country culture and family specific

government debt redistributive fiscal policies and the interaction between borrowing constraints and intergenerational altrusim abstract we show how borrowing constraints intergenerational altruism and their interaction shape the aggregate savings response to government debt and fiscal policies that redistribute resources between living generations we also characterize the conditions under which borrowing constraints bind and the altruistic transfer motive operates in terms of the strength of the altruism motive the shape of the lifetime productivity profile the willingness to substitute consumption intertemporally and other factors finally we characterize the dynamic response of aggregate savings to nonneutral government debt policies in economies with binding borrowing constraints

carbon taxation in russia prospects for a double dividend and improved energy efficiency russia is not only one of the world s major sources of carbon based energy coal oil and gas but is also one the most intensive users of energy furthermore russia accounts for a disproportionately large share of global carbon dioxide emissions some 5 to 6 of global carbon dioxide emissions eia 2011a it has been estimated world bank 2008 that russia could reduce its use of primary energy use by 45 with consequent economic and environmental benefits high energy and carbon intensity of the russia economy is inter alia explained by low energy prices due to high export taxes as well as administrative regulation of domestic prices of gas and electricity and low environmental taxes carbon taxes are one such pigouvian tax and they would address concerns on several fronts simultaneously in the short to medium term they would inter alia lead to lower ghg emissions and encourage the diffusion of more energy efficient technologies in the longer term the increased cost of energy inputs is expected to induce technological progress in this analysis the macroeconomic and sectoral effects of carbon taxes on the russia economy are examined this analysis addresses the following objectives i to test the double dividend hypothesis under perfect and imperfect competition in output markets to analyse ii the incidence of carbon taxes iii impacts on sectoral competitiveness iv effects on income equity and v interactions of carbon taxes with other taxes a computable single country multi sector comparative static cge model is employed russland verfugt nicht nur uber einen der grosten vorrate an kohlenstoffbasierter energie wie kohle rohol und gas sondern ist auch einer der grosten energieverbraucher daruber hinaus ist russland fur einen uberproportional grosen anteil von kohlendioxid emission etwa 5 bis 6 der weltweiten kohlendioxidemission verantwortlich mit der einfuhrung einer kohlendioxidsteuer konnten gleichzeitig unterschiedliche wirkungen erzielt werden kurz und mittelfristig wurden kohlenstoffsteuern sowohl zu einer reduzierung von treibhausgasemissionen als auch zur einfuhrung von energieeffizienteren technologien fuhren langfristig wird erwartet dass hohe energiekosten den anreiz zur entwicklung und zur investition in energiesparenden technischen fortschritt erhohen die vorliegende arbeit analysiert und bewertet die makrookonomischen und sektoralen auswirkungen einer einfuhrung von kohlenstoffsteuern auf die russische wirtschaft die ziele der arbeit bestehen darin die hypothese der doppelten dividende fur den fall des vollkommenen und des unvollkommenen wettbewerbs auf gutermarkten zu uberprufen und die inzidenz einer kohlenstoffsteuer ihre auswirkungen auf die sektorale wettbewerbsfahigkeit ihre auswirkungen auf die einkommensverteilung und die interaktion von kohlenstoffsteuern mit anderen steuern zu analysieren und zu bewerten als methodischer ansatz wurde ein single country und multi sektor model gewahlt

altruism deficit policies and the wealth of future generations i introduction there is now a substantial body of evidence suggesting that altruistic financial bequests are zero for the vast majority of households 1 other studies seem to indicate that the financial bequests which are made are not likely to be altruistically motivated 2 while this evidence against the importance of altruistic financial bequests seems reasonably convincing it is by no means clear that the importance of altruism per se has been dismissed 3 for example the results reported in altonji hayashi and kotlikoff 1992 tables 14 17 indicate that extended family resources while not perfectly linked to own resources are important for explaining own consumption the authors do not reject the notion that substantial altruistically motivated transfers occur in the u s rather they suggest the altruistically motivated transfers which are made take the form of less than fully efficient human capital transfers to children if most altruistic transfers do take place via educational expenditures how does this affect the ricardian equivalence theorem robert barro 1974 1989 argues the presence of any altruistic transfer is sufficient to guarantee that intergenerational transfers caused by government policy are neutral other forms of intergenerational transfers such as inter vivos gifts to children support of children s education and so on can work in a similar manner therefore the ricardian results will hold even if many persons leave little in the way of formal bequests 1989 41 4 an alternative view however is expressed by allan drazen 1978 he argues if parents possess an insufficient mix of wealth and altruism intergenerational transfers could be exhausted before the efficient level of human capital investment is achieved if explicit or implicit loans between parents and children are not possible then the government may be able to improve welfare by generating intergenerational transfers from children to parents 5 a cut in the parents tax burden and an equal present value increase in the tax on the next generation is equivalent to a government enforced loan at the going market interest rate since educational expenditures are inefficiently low the return on human capital investment exceeds the loan rate therefore parents could put an amount less than the tax cut into their children s education and still leave the children with enough additional income to pay for the future tax increase thus a deficit policy serves to expand the consumption possibility set of the family viewed in this way drazen 1978 514 footnote 7 imagines an argument for a pareto optimal level of public debt issue 6 a third possibility was identified by nerlove razin and sadka 1988 who conduct the most explicit analysis of government transfers in an economy with altruistic but financial bequest constrained households they also find a transfer or implicit loan to parents from their children will make the parents unambiguously better off however they were the first to point out that a deficit policy may lower the welfare of the children although they fail to explain why thus even in the presence of altruistic transfers from parents to children the effect of deficits on the consumption of future generations is far from clear in this paper we wish to clarify the effect of intergenerational transfers on bequest constrained families the next section intuitively explains why a government loan or deficit policy generates an ambiguous effect on the children s consumption even though altruistic parents are fully capable of making both generations better off after the loan we also identify the key structural determinants of the change in the children s wealth due to the loan in section iii we extend the simple model of section ii to a more quantitatively realistic multi period life cycle simulation model of a bequest constrained household the simulation model is then used in section iv to examine how a government intergenerational transfer affects the consumption of each generation under various settings of the key structural determinants identified in section ii

motives for private transfers over the life cycle an analytical framework and evidence for peru abstract this paper tests for the motives for private income transfers we consider two motives altruism and exchange the question of private transfer motives is important because such motivation can influence the effects of public income transfers on the distribution of income using a household survey for peru we find that transfer amounts received increase with recipient pre transfer income which contradicts a key prediction of the strong form of the altruism hypothesis but is consistent with exchange we also find that capital market imperfections are likely to be an important cause of private transfers and that social security benefits crowd out the incidence of private transfers

economists views about parameters values and policies survey results in labor and public economics specialists in labor economics and public economics at 40 leading research universities provided opinions of policy proposals quantitative best estimates and 95 percent confidence intervals for economic parameters and answers to values questions regarding income redistribution efficiency versus equity and individual versus social responsibility their positions on policy are more closely related to their values than to their estimates of relevant economic parameters average best estimates of the economic parameters agree well with the relevant literature but individual best estimates are usually widely dispersed the individual 95 percent confidence intervals are much narrower than the substantial cross respondent variation in estimates would warrant

efficient congestion tolls in the presence of unpriced congestion a peak and off peak simulation model abstract this paper develops a congestion pricing model to examine efficient congestion tolls for an urban highway facility that resembles california state route 91 the highway that has been subject to congestion tolls since december 27 1995 two lanes out of six each way are subject to congestion tolls and the other four lanes are not the simulation model combines the economic theories of second best pricing of transportation facilities and peak load pricing and considers both welfare maximizing and profit maximizing cases the simulation results show that the second best peak period toll is quite low and that the welfare gains from the toll are modest compared to a regime in which all lanes are subject to tolls

peak load pricing of a transportation route with an unpriced substitute abstract this paper considers two routes to work which could be two bridges a freeway and a tollroad or roadway travel and subway travel both routes are subject to pure bottleneck and queue congestion if peak load pricing can be imposed on both routes the first best solution is attained however if one route is unpriced then the other route should have a second best time varying toll that is negative at the tails of the rush hour positive near the peak of the rush hour and zero on average if the two routes have the same capacities and if the parameter g is 1 then two thirds of the total traffic should use the priced route and the efficiency gain of second best pricing is two thirds of the efficiency gain of first best pricing

when can carbon abatement policies increase welfare the fundamental role of distorted factor markets abstract this paper employs analytical and numerical models to assess the welfare effects of a revenue neutral carbon tax and nonauctioned carbon emissions permits taking into account preexisting tax distortions in factor markets the presence of preexisting taxes significantly raises the general equilibrium costs of both policies this cost increase is much greater under emissions permits since this policy does not generate revenues to reduce distortionary taxes under our central estimates emissions permits cannot increase welfare unless environmental damages exceed about 18 per ton of carbon in contrast an appropriately scaled carbon tax is welfare improving so long as environmental damages are positive

labour supply and commuting abstract we examine the effect of commuting distance on workers labour supply patterns distinguishing between weekly labour supply number of workdays per week and daily labour supply we account for endogeneity of distance by using employer induced changes in distance in germany distance has a slight positive effect on daily and weekly labour supply but no effect on the number of workdays the effect of distance on labour supply patterns is stronger for female workers but it is still small

the non tax wedge abstract this paper argues that there are a large number of non tax phenomena that have the effect of reducing input prices below marginal value products just as do taxes on income it is shown that the presence of the non tax wedge between the marginal value product of labor and the net wage is highly significant for the analysis of the total and marginal welfare costs of taxes similarly the presence of the tax wedge is significant for the analysis of the welfare effects of the non tax phenomena welfare costs are substantially higher when appropriate account is taken of tax and non tax wedges that both distort supply decisions

carpooling and driver responses to fuel price changes evidence from traffic flows in los angeles abstract we examine carpooling and driver responses to fuel price changes using a simple theoretical model we show that traffic flows in mainline lanes unambiguously decrease when fuel prices increase and this effect is stronger when the presence of a carpool lane provides a substitute to driving alone in contrast in carpool hov lanes flow can either increase or decrease these predictions are tested using 8 years of traffic flow data for 1700 locations in los angeles in our preferred specification the mean elasticity of flow with respect to fuel price is 0 136 for hov lanes for a 10 increase in fuel price this implies 10 additional carpools per hour 8 8 million per year in additional congestion costs for carpoolers and 11 3 million lower costs for mainline drivers for mainline lanes flow elasticities are 0 083 and 0 050 for highways with and without an hov lane these estimates imply that the mean highway with an hov lane experiences a 30 larger decrease in hourly flow compared to the mean highway without an hov lane flows in hov lanes show an immediate decrease following a price increase but respond positively to price increases over time which suggests time is an important input to carpool formation

credit markets with differences in abilities education distribution and growth this article presents an endogenous growth model in which credit markets affect time allocation of individuals with different educational abilities credit markets allow the more able to specialize in studying and the less able to specialize in working this specialization can increase growth and welfare this article also shows that in economies with high low levels of education abilities the opening of credit markets induces a more disperse equal income distribution the role of intergenerational transfers in overcoming the absence of credit markets is also discussed as well as other forms of credit markets imperfections

fiscal policy with heterogeneous agents and incomplete markets i undertake a quantitative investigation into the short run effects of changes in the timing of proportional income taxes for model economies in which heterogeneous households face a borrowing constraint temporary tax changes are found to have large real effects in the benchmark model a temporary tax cut increases aggregate consumption on impact by around 29 cents for every dollar of tax revenue lost comparing the benchmark incomplete markets model to a complete markets economy income tax cuts provide a larger boost to consumption and a smaller investment stimulus when asset markets are incomplete copyright 2005 wiley blackwell

transport tax reform commuting and endogenous values of time abstract we consider a model of urban transport with two trip purposes commuting assumed perfectly complementary to labour supply and noncommuting to analyse the effects of transport tax reform on the value of time and marginal external congestion costs higher commuting taxes plausibly reduce time values but higher noncommuting transport prices will typically raise the value of time the intuition for this latter finding is that the reduction in congestion that follows from the tax increase itself raises net wages per hour of work inclusive of commuting time empirical illustrations with belgian data show a potentially large effect of transport tax reform on time values in quite a few of the tax reforms studied traffic levels are reduced but the increase in time values implies that marginal external congestion costs actually increase

funding transportation spending in metropolitan washington dc the costs of alternative revenue sources abstract this paper develops and implements an analytical framework for estimating the efficiency costs of raising additional revenue from taxes on labor property gasoline peak road use and higher transit fares for the washington dc area the model incorporates driving externalities and interactions between the different policies an economic case can be made for using congestion taxes and possibly gasoline and property taxes to raise extra revenue though it should be qualified for example the inelastic demand for driving limits the congestion benefits per dollar of revenue raised and these taxes have adverse employment effects in the same way that a tax on labor income does

tax avoidance and the deadweight loss of the income tax traditional analyses of the income tax greatly underestimate deadweight losses by ignoring its effect on forms of compensation and patterns of consumption the full deadweight loss is easily calculated using the compensated elasticity of taxable income to changes in tax rates because leisure excludable income and deductible consumption are a hicksian composite good microeconomic estimates imply a deadweight loss of as much as 30 of revenue or more than ten times harberger s classic 1964 estimate the relative deadweight loss caused by increasing existing tax rates is substantially greater and may exceed 2 per 1 of revenue

ricardian equivalence in the presence of capital market imperfections abstract it is a common claim that ricardian equivalence fails if capital markets are imperfect the validity of this claim is examined for the case of informationally imperfect capital markets we present three alternative models of adverse selection and analyze the effects of debt finance in these models it is shown that a debt financed tax cut can lead to pareto improvement in some cases in the theoretically most preferable model however ricardian equivalence survives in spite of genuine imperfections in the capital market the results point to the importance of specifying the exact nature of imperfection

the value of automobile travel time implications for congestion policy abstract public policy has remained stoutly resistant to the economic profession s call to use congestion tolls to minimize the social costs from automobile congestion this paper explores this issue by using stated preference models to estimate the value that commuters are willing to pay to save travel time we find that this value is low and surprisingly insensitive to travel conditions and how toll revenues are used it appears that even high income commuters having adjusted to congestion through their modal residential workplace and departure time choices simply do not value travel time savings enough to benefit substantially from tolls

automobile externalities and policies this paper discusses the nature and magnitude of externalities associated with automobile use including local and global pollution oil dependence traffic congestion and traffic accidents it then discusses current federal policies affecting these externalities including fuel taxes fuel economy and emissions standards and alternative fuel policies summarizing insofar as possible the welfare effects of those policies finally we discuss emerging pricing policies including congestion tolls and insurance reform and summarize the appropriate combination of policies to address automobile externalities

empirical evidence on consumption smoothing and intergenerational transfers in this study i examine empirically intergenerational linkage in terms of resources transfers in the extended family in particular conditional on a household s and its parents or children s liquidity constraints status i look at how far the household can smooth its consumption in face of negative income shocks the permanent income hypothesis postulates that households make their consumption decisions based on their lifetime resources thus their consumption trajectory follows a smooth path in face of shocks to their income however in various tests 8 10 the unconditional form of the hypothesis has been rejected it is conjectured and generally agreed that the rejections of the hypothesis are mainly due to the presence of liquidity constraints i e capital market imperfections see zeldes 22 for a recent empirical investigation and hayashi 12 for an excellent survey moreover the works by cochrane 4 and mace 19 further confer cogency on the liquidity constraints capital market imperfections argument in testing whether households have full consumption insurance or equivalently the existence of complete markets against idiosyncratic shocks they reject their null of the existence of full consumption insurance in some of their tests

congestion tolling with agglomeration externalities abstract consider an urban economy with two types of externalities negative traffic congestion externalities and positive agglomeration externalities deriving from non market interaction suppose that urban travel can be tolled that non market interaction cannot be subsidized and that non market interaction is stimulated by a reduction in travel costs then the optimal toll is below the congestion externality cost this paper explores this line of reasoning

revenue recycling and the welfare effects of road pricing the authors explore the interaction between taxes on work related traffic congestion and preexisting distortionary taxes in the labor market a congestion tax raises the overall costs of commuting to work and discourages labor force participation at the margin when revenues are returned in lump sum transfers the resulting efficiency loss in the labor market can be larger that the pigouvian efficiency gains from internalizing the congestion externality by contrast if congestion tax revenues are used to reduce labor taxes the net impact on the labor supply is positive and the efficiency gain in the labor market can raise the overall welfare gains of the congestion tax by as much as 100 percent recycling congestion tax revenues in public transit subsidies produces a positive but smaller impact on the labor supply in short the authors results indicate that the presence of preexisting tax distortions and the form of revenue recycling can crucially affect the size and possibly even the sign of the welfare effect of road pricing schemes the efficiency gains from recycling congestion tax revenues in other tax reductions can amount to several times the pigouvian welfare gains from congestion reduction

love thy children abstract this paper proves that barro s 1974 debt neutrality proposition whose relevance hinges in an economy with bequest motives on bequests being operative in the economy without public debt is not applicable to a wide class of overlapping generation economies those with a weak bequest motive in particular it is shown that the bequest motive is always too weak and public debt therefore non neutral when non physical assets have a well defined function reducing oversavings in the corresponding economy without bequest motive i e when the non altruistic economy is dynamically inefficient

revenue raising vs other approaches to environmental protection the critical significance of pre existing tax distortions using analytical and numerical general equilibrium models we show that preexisting factor taxes produce a tax interaction effect that increases the costs of pollution taxes and quotas under policies that raise revenue and recycle it through cuts in marginal factor tax rates this effect is partially offset by a revenue recycling effect grandfathered pollution quotas such as those used under the 1990 clean air act amendments to regulate electric utilities so2 emissions do not benefit from this offset preexisting taxes raise this regulation s cost by over 70 more than half of this additional cost could be avoided by auctioning quotas and exploiting the revenue recycling effect

short run fiscal policy welfare redistribution and aggregate effects in the short and long run abstract this paper quantifies the effects of two short run fiscal policies a temporary tax cut and rebate transfer that are intended to stimulate economic activities a reduction in income taxation provides immediate incentives to work and save more raising aggregate output and consumption a temporary rebate is mostly saved and increases consumption marginally both policies improve the overall welfare of households and the rebate policy benefits especially low income households in the long run however the debt accumulated to finance the stimulus and a higher tax to service the debt can crowd out capital and lower output and consumption causing welfare to deteriorate

commuting and labour supply revisited according to theory road pricing may reduce welfare when labour supply is negatively distorted by an income tax this effect particularly occurs when commuting costs reduce labour supply we examine the hypothesis that commuting costs reduce labour supply in the short run in particular we estimate the effect of commuting time on labour supply in the uk we account for endogeneity of commuting time by employing exogenous changes in commuting time resulting from firm relocations and changes in infrastructure our results cast doubt on the idea that increases in commuting cost reduce labour supply at least in the short run more precisely we find that females labour supply reacts positively to or is unaffected by increases in commuting time whereas males labour supply is unaffected