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

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

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

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

going one s own way drivers in developing business models for sustainability business models have received much attention in recent years due to their importance in the fundamental logic of every company this paper is based on a qualitative empirical research study conducted in cooperation with 10 austrian companies in 2014 it aims to investigate business models for sustainability in order to better understand how they operate and what the drivers for developing these business models are this is a cross industry sample covering companies showing notable sustainability activities in fact half of the companies were founded with the intention of complying with sustainability principles the results show that business models incorporating aspects of sustainability do not differ substantially from traditional business models however they do require specific adaptations and extensions furthermore the findings highlight the significance of company leaders in organizing change processes so as to encompass sustainable business practices the findings reveal that business models undergo constant change and that sustainability plays a central role both internally and externally the results gained allow for a deeper understanding of the motivational aspects and drivers needed in developing business models for sustainability and serve as a solid basis for further research in this field

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

why did the energy intensity fall in china s industrial sector in the 1990s the relative importance of structural change and intensity change there have been a variety of studies investigating the relative importance of structural change and real intensity change to the change in china s energy consumption in the 1980s however no detailed analysis to date has been done to examine whether or not the increased energy efficiency trend in the 1980s still prevailed in the 1990s this article has filled this gap by investigating the change in energy consumption in china s industrial sector in the 1990s based on the data sets of value added and end use energy consumption for the 29 industrial subsectors and using the newly proposed decomposition method of giving no residual our results clearly show that the overwhelming contributor to the decline in industrial energy use in the 1990s was the decline in real energy intensity indicating that the trend of real energy intensity declines in the 1980s at the 2 digit level was still maintained in the 1990s this conclusion still holds even if we lower the growth rate dramatically in line with the belief that the growth rate of china s gdp may be overestimated

index decomposition analysis applied to co2 emission studies index decomposition analysis ida was first extended from energy consumption to energy related co2 emission studies in 1991 since then many studies have been reported covering various countries and emission sectors however unlike the case of energy consumption studies a comprehensive literature survey that focuses specifically on emission studies has so far not been reported in this paper we attempt to fill this gap by reviewing 80 papers appearing in peer reviewed journals from 1991 to 2012 in this application area the first part of this paper deals with the developments with regard to the ida approaches used by researchers and the scope and focus of their studies in the second part the empirical results reported in the surveyed studies are analyzed consolidated and presented by emission sector the objective is to reveal the relative contributions of key effects on changes in the aggregate carbon intensity and this is done by emission sector and by country the findings of both parts are useful in understanding the development of ida in the application area of emission study as well as the key drivers of aggregate carbon intensities in the past and their possible future developments

china s changing energy intensity trend a decomposition analysis china experienced a dramatic decline in energy intensity from the onset of economic reform in the late 1970s until 2000 but since then the rate of decline slowed and energy intensity actually increased in 2003 most previous studies found that most of the decline was due to technological change but disagreed on the role of structural change to the best of our knowledge no decomposition study has investigated the role of inter fuel substitution in the decline in energy intensity or the causes of the rise in energy intensity since 2000 in this paper we use logarithmic mean divisia index lmdi techniques to decompose changes in energy intensity in the period 1980 2003 we find that 1 technological change is confirmed as the dominant contributor to the decline in energy intensity 2 structural change at the industry and sector sub industry level actually increased energy intensity over the period of 1980 2003 although the structural change at the industry level was very different in the 1980s and in the post 1990 period 3 structural change involving shifts of production between sub sectors however decreased overall energy intensity 4 the increase in energy intensity since 2000 is explained by negative technological progress 5 inter fuel substitution is found to contribute little to the changes in energy intensity

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

the lmdi approach to decomposition analysis a practical guide in a recent study ang energy policy 32 2004 compared various index decomposition analysis methods and concluded that the logarithmic mean divisia index method is the preferred method since the literature on the method tends to be either too technical or specific for most potential users this paper provides a practical guide that includes the general formulation process summary tables for easy reference and examples

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

why did china s energy intensity increase during 1998 2006 decomposition and policy analysis abstract despite the fact that china s energy intensity has continuously decreased during the 1980s and mostly 1990s the decreasing trend has reversed since 1998 and the past few years have witnessed rapid increase in china s energy intensity we firstly conduct an index decomposition analysis to identify the key forces behind the increase it is found that 1 the high energy demand in industrial sectors is mainly attributed to expansion of production scale especially in energy intensive industries 2 energy saving mainly comes from efficiency improvement with energy intensive sectors making the largest contribution and 3 a heavier industrial structure also contributes to the increase this study also makes the first attempt to bridge the quantitative decomposition analysis with qualitative policy analyses and fill the gap between decomposition results and policy relevance in previous work we argue that 1 energy efficiency improvement in energy intensive sectors is mainly due to the industrial policies that have been implemented in the past few years 2 low energy prices have directly contributed to high industrial energy consumption and indirectly to the heavy industrial structure we provide policy suggestions in the end

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

structural decompositions of energy consumption between 1995 and 2009 evidence from wiod abstract energy is key to achieving sustainable development this paper explicitly distinguishes between the supply side of energy consumption and demand side of energy consumption and investigates the factors that affect the energy consumption across economies using data from the world input output database wiod this paper decomposes the relative changes of energy consumption into intensity effect production structure structural change in final demand total final demand effect and household consumption then it further decomposes production structure into inter industry structural effect and trade effect in intermediate inputs overall energy consumption growth is mainly driven by total final demand 55 04 increase at the world level but can be significantly reduced by intensity effect due to technological change 21 02 decrease at the world level there is heterogeneity of structure related effects across economies and within the same economy in both aspects of energy consumption in addition the trade effect and household effect are relatively small this paper provides an empirical framework for analyzing energy consumption in a globalizing world and suggests tailored and integrated energy policies

regulation and development of the argentinean gas market gas markets are becoming increasingly important around the world and the long term evolution of these markets is of strategic importance for many countries this makes it essential to understand how regulation and intervention in these markets affects the long term prospect for the secure supply of gas we use argentina as a case to illustrate some of the issues and consequences of gas regulation argentina is a country that has had a significant increase in the use of gas over the years and where a potential gas deficit looms large in the present and the future based on a simulation model developed to understand the supply of gas in argentina we discuss how regulation will influence the long term supply of gas in both argentina and surrounding countries using the model we develop a series of scenarios to highlight the consequences of different current and possible future interventions in the market by the regulator finally we discuss short term regulatory options to reduce the impact of a gas deficit and the possibility of securing the long term supply of gas in argentina

factors shaping aggregate energy intensity trend for industry energy intensity versus product mix understanding the mechanisms of change of energy consumption in industry has attracted much attention since the 1973 world oil crisis a popular line of research has been to decompose changes in the aggregate energy intensity of industry to give the relative impacts arising from energy intensity change and product mix change using a decomposition technique many empirical studies covering a large number of countries have been reported the main objective of this paper is to put together the empirical results reported in these studies in a coherent framework and identify possible systematic features of particular interest are the basic trends in this line of research the relative importance of energy intensity change and product mix change possible variations over time and between country groups in the energy impacts of these changes and inconsistencies in findings among studies an overview of the decomposition technique including its strengths weaknesses and role in industrial energy consumption studies is also presented

attribution of changes in divisia real energy intensity index an extension to index decomposition analysis abstract in this paper we extend the methodology of index decomposition analysis ida in energy studies by quantifying the contribution of individual attributes to the percent change of factors such as the real energy intensity index and structural change index we apply the proposed method to the real energy intensity index in the multiplicative logarithmic mean divisia index m lmdi approach a major ida technique since the m lmdi is based on geometric mean type indices and chain computation we need some appropriate method to cope with the difficulties that arise we present a numerical illustration of the proposed method using the energy consumption and real value added data of the us manufacturing industry and compare the results obtained by the fisher real energy intensity index

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

the energy intensity in lithuania during 1995 2009 a lmdi approach abstract the measurement assessment and effective mitigation of energy intensity compose a foremost objective of contemporary energy policy although the european union eu member states have been experiencing the convergence in energy efficiency indicators lithuania acceded to the eu in 2004 still remains peculiar with relatively high energy intensity our study therefore is aimed at analyzing the energy intensity trends in lithuanian economy as a whole as well as in separate economic sectors the investigation covers the period of 1995 2009 the logarithmic mean divisia index was applied for decomposition analysis our analysis has shown that energy efficiency falls during economic downturn in order to facilitate these challenges the lithuanian government as well as business should opt for increasing energy efficiency in the most problematic sectors of transport and services in addition the analysis of legal acts namely national energy efficiency programme for 2006 2010 and energy efficiency action plan for 2010 2016 was taken into consideration some suggestions thus were offered for successful implementation of strategic goals outlined in the aforementioned strategic documents

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

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

energy intensity in the iron and steel industry a comparison of physical and economic indicators abstract energy consumption of the iron and steel industry is examined in seven countries brazil china france germany japan poland and the united states for the period 1980 1991 using a decomposition analysis based on physical indicators for process type and product mix we decompose intra sectoral structural changes and efficiency improvements specific energy consumption decreased in all countries except poland efficiency improvement played a key role in brazil china germany and the us while structural changes were the main driver for energy savings in france and japan we also compare the use of various economic indicators to physical indicators and find that they do not track physical developments well in poland or the developing countries we studied in the industrialized countries value added based energy intensity indicators generally reflect the specific energy consumption better than other economic indicators although large differences occur in individual years we found a smaller correlation between other economic indicators gross output and value of shipments and specific energy consumption we conclude that use of physical energy intensity indicators improves comparability between countries provides greater information for policy makers regarding intra sectoral structural changes and provides detailed explanations for observed changes in energy intensity

how does the implementation of the policy of electricity substitution influence green economic growth in china abstract to promote the level of electrification reduce environmental pollution and achieve the goal of clean energy usage and green economic growth in china the national development and reform commission and other eight departments jointly issued and implemented the policy of electricity substitution in 2016 electricity substitution aims to replace traditional fossil fuels such as coal and fuel oil with clean electric energy in different fields e g industry transportation and construction and deal with the pollutants at power generation however we still need to find out the exact impact of the policy of electricity substitution on energy saving and emission reduction in this paper we estimate the economically feasible increment of electricity demand according to different classifications in electricity substitution technology furthermore based on the input output model we discuss the relative influence of the policy of lectricity substitution the main conclusions are first the policy of electricity substitution alone is not adequate to reduce the dependence on fossil energy and environmental pollution under china s current power generation structure we should also increase the use of renewable energy second the power sector plays a leading role in stimulating economic output and the increasing electricity consumption due to the policy of electricity substitution can boost the green development of china s economy

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

analysis and decomposition of energy consumption in the chilean industry abstract with rising energy costs and climate change concerns energy efficiency will be important in maintaining competitiveness and reducing the environmental impact of industrial activities in this paper we study the chilean industrial sector which is the largest consumer of energy within the country energy demand and co 2 emissions in chile have grown rapidly in recent years while energy supply is mostly imported and subject to disruption therefore it is important to understand energy consumption in this sector and determine which sub sectors have the greatest potential to reduce energy consumption we used the index decomposition analysis ida applying the logarithmic mean divisia index method i lmdi i to quantify the impact of diverse driving factors on energy consumption furthermore a panel data analysis was used to determine whether there are differences in energy intensity across firms with different characteristics our results show that energy intensity has risen over time although energy consumption remains stable this fact supports the idea that energy efficiency policies could play an important role for the industrial sector additionally energy consumption and energy intensity follow different patterns in each sub sector therefore we conclude that the application of differentiated sectoral policies is preferable over a single global policy

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

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

how can chile move away from a high carbon economy abstract this paper quantitatively evaluates the performance of chile s co2 emissions between 1991 and 2013 using a complete decomposition technique to examine emissions and their components a decomposition analysis based on log mean divisia index method lmdi i was conducted six decomposition factors were considered carbon intensity effect ci res penetration effect res energy intensity effect ei economy structure effect es income effect yp and population effect p to know how these factors could influence each other in the future the innovative accounting approach iaa was used including forecast error variance decomposition and impulse response functions irfs these two methodologies allow us to identify the drivers of co2 emission changes in the past 1991 2013 test policy measures and learn how these drivers could influence each other in the future to evaluate whether the current measures meet the paris commitments the lmdi analysis results show that the energy intensity factor is the main compensating factor of chile s co2 emissions and the only effect with a clear trend to aid the economy s decoupling iaa and ifrs results react similarly and confirm that carbon intensity reacts to shocks more significantly in the short term the reaction to res has the same and opposite behavior to shocks in es and yp to disappear in the long term

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

towards a sustainable growth in latin america a multiregional spatial decomposition analysis of the driving forces behind co2 emissions changes abstract this paper aims to understand the driving forces behind the growth of co2 emissions in latin america as a region by groups of countries according to their behaviour in terms of growth of income and co2 emissions per capita and by countries during 1990 2013 the main drivers for the latin america region are the activity and the population effects followed by the fossil fuel and the carbonisation effects while the intensity effect is revealed as the only inhibitor the lessons from latin america s group of countries are the following first the necessary decoupling between the growth of co2 emissions and the economic activity has not taken place the population growth also being an important driver effect second the groups of countries with the highest co2 emissions growth show the highest population and fossil fuel effects this latter confirms the scant efforts made to reduce the weight of fossil fuels in the total primary energy supply third the energy intensity has become the most important inhibitor of co2 emissions for those countries that are not able to substitute fossil fuels so easily finally the desirable increase of less pollutant fossil fuels or even the increase of renewable energies has not yet been achieved