welfare costs of inflation and interest bearing money this work extends the lucas analysis of the welfare cost of inflation to an economy with interest bearing deposits lower and upper bounds to lucas measure of the welfare cost of inflation are also provided the upper bound is shown to lie between lucas measure of the welfare cost of inflation and the area under the money demand curve starting with martin bailey in 1956 the literature on welfare costs of inflation has recently been enriched by contributions among others by lucas 1993 2000 dotsey and ireland 1996 and gillman 1993 1995 it remains yet to adequately integrate the banking sector in this process this work extends lucas analysis of the welfare cost of inflation developed in the mccallumgoodfriend 1987 framework to an economy with interest bearing deposits lower and upper bounds to lucas measure of the welfare cost of inflation are also provided the upper bound is shown to lie between lucas measure and the area under the money demand curve which characterizes bailey s method 1956 for calculating the welfare cost of inflation

spatial targeting of payments for environmental services a tool for boosting conservation benefits abstract payments for environmental services pes have become an increasingly popular market based instrument to translate external non market environmental services into financial incentives for landowners to preserve the ecosystems that provide the services however lack of spatial differentiation in the targeting mechanism may lead to efficiency losses addressing this challenge we construct an applied site selection tool which takes into account three variables that vary in space environmental services provided risks of losing those services and participation costs using data from costa rica s nicoya peninsula we empirically test the tool s potential to increase the financial efficiency of the forest focused pes program in place results show that given a fixed budget efficiency increases radically if per hectare payments are aligned to landowners heterogeneity in participation costs involving opportunity transaction and direct costs of protection respectively selecting sites based on environmental service potential also moderately increases efficiency overall additionality could in the best case be doubled but remains generally limited due to current low deforestation risks prevailing in costa rica to take advantage of the high efficiency potentials of flexible payments we propose inverse auction systems as a cost effective approach for the determination of micro level participation costs

seigniorage banking and the optimal quantity of money abstract this paper discusses seigniorage in an economy with imperfect competition in the banking sector the amount of total seigniorage and its division between the central bank and the banking sector are derived by using the opportunity cost concept of seigniorage the paper analyzes the impact of changes in inflation reserve requirements competition and technology on the division of seigniorage and on the welfare loss and relates the analysis to the concept of the optimal quantity of money

competition and interest rate ceilings in commercial banking regulations prohibiting the payment of explicit interest on demand deposits are gradually being eased as banks switch from payment in the form of free services to explicit interest both the level of money demand and the response of money demand to market interest rates will change banks are modeled here as being chamberlinian monopolistic competitors equilibrium deposit interest rate relationships are found for markets both with and without an effective interest rate ceiling and the behavior of the two markets is compared the elimination of deposit interest rate ceilings leads to increased money demand and an increased responsiveness of deposit rates to market interest rates

adapting auctions for the provision of ecosystem services at the landscape scale abstract auctions or competitive tenders can overcome information asymmetries to efficiently allocate limited funding for ecosystem services most auctions focus on ecosystem services on individual properties to maximise the total amount provided however for many services it is not just the total quantity but their location in the landscape relative to other sites that matters for example biodiversity conservation may be much more effective if conserved sites are connected adapting auctions to address ecosystem services at the landscape scale requires an auction mechanism which can promote coordination while maintaining competition multi round auctions in which bidding is spread over a number of rounds with information provided between rounds on the location of other bids in the landscape offer an approach to cost effectively deliver landscape scale ecosystem services experimental economic testing shows these auctions deliver the most cost effective environmental outcomes when the number of rounds is unknown in advance which minimises rent seeking behaviour it also shows that a form of bid improvement rule facilitates coordination and reduces rent seeking where the biophysical science is well developed such auctions should be relatively straightforward to implement and participate in and have the potential to provide significantly better outcomes than standard one shot tenders

incentive based policy design for pollution control and biodiversity conservation a review this paper provides a succinct review of the main developments in the literature on incentive based policy mechanisms in the contexts of pollution control and biodiversity conservation dating from the early beginnings of the science in the 1960s a focal point in the review is on the design features of these policy mechanisms key developments in policy design were originally established in controlling externalities arising from pollution and have since been extended to policy design tailored towards biodiversity conservation special emphasis is given to the spatial characteristics of the environmental problems underlying both pollution control and biodiversity conservation the paper concludes by drawing some lessons and setting out elements of a future research agenda in both policy domains

designing payments for environmental services in theory and practice an overview of the issues abstract payments for environmental services pes have attracted increasing interest as a mechanism to translate external non market values of the environment into real financial incentives for local actors to provide environmental services es in this introductory paper we set the stage for the rest of this special issue of ecological economics by reviewing the main issues arising in pes design and implementation and discussing these in the light of environmental economics we start with a discussion of pes definition and scope we proceed to review some of the principal dimensions and design characteristics of pes programs and then analyze how pes compares to alternative policy instruments finally we examine in detail two important aspects of pes programs their effectiveness and their distributional implications pes is not a silver bullet that can be used to address any environmental problem but a tool tailored to address a specific set of problems those in which ecosystems are mismanaged because many of their benefits are externalities from the perspective of ecosystem managers pes is based on the beneficiary pays rather than the polluter pays principle and as such is attractive in settings where es providers are poor marginalized landholders or powerful groups of actors an important distinction within pes is between user financed pes in which the buyers are the users of the es and government financed pes in which the buyers are others typically the government acting on behalf of es users in practice pes programs differ in the type and scale of es demand the payment source the type of activity paid for the performance measure used as well as the payment mode and amount the effectiveness and efficiency of pes depends crucially on program design

interpreting income distributions in a welfare state the case of sweden abstract it is shown in this paper that the distribution of purchasing power and hence probably also economic well being in a welfare state like sweden is not tightly connected with the contribution of households in the production system moreover economic inequality is drastically exaggerated when income statistics are not adjusted for differences in working time and in the time profile of income over life however it is also shown that some important inequalities are not removed even by the very ambitious tax and welfare state system in sweden and that some new inequalities are in fact introduced the paper also tries to highlight the wide wedges which in an advanced welfare state are necessarily driven between factor costs for firms and factor rewards for households all this holds in particular for annual income

towards a fair constructive and consistent criticism of all valuation languages comment on kallis et al 2013 we provide critical notes to the paper by kallis et al 2013 on monetary valuation we evaluate the four criteria they propose for assessing valuation studies we argue that no clear distinction is made between monetary valuation and pricing instruments the selected criteria are more relevant to assessing policy than monetary valuation the examples provided are not representative of the diversity of valuation studies encountered in the literature moreover no clear examples are provided of where valuation and associated cost benefit analysis of environmental policy go wrong we plea for a more fair constructive and consistent criticism of all valuation languages and offer relevant issues for consideration

a conservation industry for sustaining natural capital and ecosystem services in agricultural landscapes conservation investment in agricultural landscapes has evolved to take a more market based or business approach however current levels of conservation investment are not likely to mitigate degradation to natural capital and ecosystem services we propose the further evolution of a conservation industry to generate substantially increased investment in conservation in agricultural landscapes particularly from the private sector a mature conservation industry is envisaged as comprising of investors producers and service providers who produce conservation products and services exchanged via market transactions a number of requirements for a viable and effective conservation industry are identified including institutional infrastructure conservation market institutions and regulatory systems information provision quantifying benefits business models and accounting and auditing standards and facilitation entrepreneurship incubation and capacity building a conservation industry requires careful design and planning in order to operate effectively whilst it is not without risk a conservation industry has the potential to increase participation and investment in conservation actions and enhance the sustainability of agricultural landscapes

pay the farmer or buy the land cost effectiveness of payments for ecosystem services versus land purchases or easements in central kenya abstract payments for ecosystem services pes have emerged as a popular conservation tool yet evaluation alongside other direct conservation strategies remains piecemeal we prospectively compared cost effectiveness of pes to land purchases or easements lpe in central kenya we spatially predicted opportunity costs and land prices using household survey and literature data and sampled conservation management costs from four regional conservation organizations we simulated a fixed budget spatial ecological economic site selection process for conservation intervention pes or lpe over 30 years we included effects of land markets property value fluctuations rising agricultural productivity and climate change depending on the scenario the lpe strategy led to larger reserves by 26 610 better representation of mammal species ranges by 47 112 and lower unit costs by 26 48 adding a yearly egalitarian social development payment to the lpe strategy did not increase costs beyond the basic pes model our findings were robust to discount rate choice but cost savings of lpe only materialized after about a decade furthermore kenyan law restricts foreign land ownership and the use of land easements thus simpler institutional requirements make pes a more immediate if less effective property based tool

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

scale and scope economies in the multi product banking firm abstract the multi product nature of the banking firm is examined utilizing the translog cost function this analysis indicates that contrary to conventional wisdom natural monopoly scale economies and product specific decreasing costs are not robust characterizations of the banking industry there is however evidence that the cost function is characterized by economies of scope the implications of these results are discussed and extensions of this approach suggested

targeting conservation investments in heterogeneous landscapes a distance function approach and application to watershed management to achieve an environmental objective at least cost decision makers must integrate information about spatially variable biophysical and economic conditions although the biophysical attributes that contribute to an environmental outcome are often known the way in which these attributes interact to produce the outcome is often unknown we introduce a nonparametric conservation targeting approach that relies on distance functions to cost efficiently allocate conservation funds we apply the approach empirically to the case of conservation contracting for water quality objectives the contract portfolios derived from the application have many desirable properties including intuitive appeal and robust performance across plausible parametric scoring measures

can financial incentives change farmers motivations an agrarian system approach to development pathways at the nicaraguan agricultural frontier abstract this article offers a conceptual methodological approach to assess how new institutional frameworks such as pes payments for ecosystem services interact with motivations for land use change at the individual and collective level increasing empirical evidence suggests that the effects of payments on inducing long term behavioural change can vary substantially depending on how they are integrated in territorial dynamics we show how individual motivation is the result of collective societal pathways that generate particular opportunities and constraints as well as guiding ideas and habits that work within these pathways through an illustrative case study at the agricultural frontier in nicaragua we show how an agrarian system approach offers a more nuanced understanding of the dynamic interactions on the ground and allows us to better connect farmers individual motivations to collective development pathways in that territory our case study also demonstrates how a local pes intervention is unlikely to lastingly alter the production system logic of farmers or stimulate long term pro environmental behaviour unless accompanied by other types of policies

heterogeneous users and willingness to pay in an ongoing payment for watershed protection initiative in the colombian andes abstract flat fees in payment for environmental services pes schemes promote administrative ease and are perceived as egalitarian however when environmental service es buyers are heterogeneous in their income and water consumption levels this scheme may not be optimal as total payments might become too low and services under supplied this paper estimates willingness to pay wtp higher fees from hydrological service buyers in an ongoing pes initiative in an andean watershed in colombia where small flat user payments have been introduced es users fall into two highly heterogeneous categories smallholder peasants and recreational house owners we perform a contingent valuation analysis in a representative sample of 218 households for improved water services es buyers on average are willing to pay monthly about us 1 premium over current flat pes rate users heterogeneity however affects significantly this outcome while recreational house owners are willing to pay monthly on average us 1 61 more than the current fee smallholders only us 0 41 spatial variables such as distance to the water distribution point and to the town center importantly influence wtp results may help designing user driven pes schemes in line with efficiency and equity objectives

china s sloping land conversion program institutional innovation or business as usual abstract china s sloping land conversion program slcp is the largest land retirement reforestation program in the developing world having the goal of converting 14 67 million hectares of cropland to forests by 2010 4 4 million of which is on land with slopes greater than 25 and an additional soft goal of afforesting a roughly equal area of wasteland by 2010 pending successful completion it could represent a 10 20 increase in china s national forest area and a 10 decrease in current cultivated area in contrast to china s other forest sector policies slcp uses a public payment scheme that directly engages millions of rural households as core agents of project implementation and has the stated principals of volunteerism thus insofar as current or future de facto program implementation involves decentralized voluntary grassroots participation slcp represents an important departure from business as usual in how china manages its forest resources this work draws upon current available research of the program and uses a 2003 household and village level survey conducted by the center for chinese agricultural policy cas to examine program design implementation and outcomes to date results indicate that significant problems in design and implementation exist with these including shortfalls in subsidies delivered lack of respect of the principals of volunteerism and insufficient technical support and budgeting for local implementation costs more fundamentally some program goals appear to be based on common misperceptions regarding the linkages between forests and watershed services overall slcp contains both innovative elements volunteerism and the direct engagement of farmers as well as components that hark back to policies and mindsets of decades past the program s top down simplified contract structure lack of sufficient consultation with local communities and rural households and campaign style mobilization the paper concludes by providing four main suggestions to improve the program 1 increase local community input in design and implementation and ensure that households have full autonomy in participation choice 2 improve technical support and budgeting for local administrative costs and capacity building 3 clarify the environmental services targeted and verify the measures needed to acquire these services and 4 integrate slcp into an overall package of complementary policies aimed at the rural sector

scale economies in banking a restructuring and reassessment the issue of scale economies in banking has a rich history most earlier studies report modest operating cost scale economies for small institutions those with less than about 50 million of deposits in 1968 dollars but are unclear where these economies might end if at all unfortunately these studies are limited in four important respects first those that were well specified did not measure the total cost of banking operations but concentrated on estimating scale economies for individual banking functions e g demand deposits separately from commercial loans second an average cost curve that could take a u shape over the full range of banks was not fitted either because larger banks were not included or because of the functional form used cobb douglas consequently the optimum or minimum cost size of a bank or office could not be determined third the variables measuring the costs of branching were misspecified fourth the branch

credit based payments for ecosystem services evidence from a choice experiment in ecuador the original conceptualization of payments for ecosystem services pes promoted direct payments to motivate the provision of environmental public goods but market imperfections and behavioral considerations can mean that pes that reduce market constraints are preferred the main issue with the latter is how to include conditionality we propose credit based pes cb pes as an incentive that links an environmental condition with the reduction of a key market constraint through a choice experiment in ecuador cb pes was found to be a promising form of pes with multiple desirable qualities of an incentive as cited in the behavioral economics and pes literatures

lifetime versus annual tax and transfer progressivity sweden 1968 2009 in this paper we analyze the evolution of tax and transfer progressivity in sweden over both annual and lifetime horizons using a rich micro panel covering the period 1968 2009 we calculate tax rates over a cohort s entire working life cycle our main finding is that taxes are considerably less progressive over the lifetime than in any single year social insurance transfers to transitory low income earners account for most of this result we offer a number of robustness checks of the measurement of lifetime incomes and progressivity but none of them changes our overall findings

when to pay adjusting the timing of payments in pes design to the needs of poor land users abstract a neglected issue in the design of payments for ecosystem services pes is the timing of payments to ecosystem service providers over the course of the year we hypothesise that timing should matter to poor land users with limited options to save money in regions dominated by subsistence farming seasonal fluctuations of food supply and peaks in expenses during the year due to cultural events such as circumcisions and funeral ceremonies that occur in specific months if land users value payments differently at different time points throughout the year the provision of ecosystem services can be increased for the given financial resources if payments are made at a point in time when land users need those most we conducted a choice experiment in the mahafaly plateau in southwestern madagascar an area which meets the aforementioned criteria to test the importance of the time of receipt of payments we found that respondents are willing to accept less money if they receive it in months of food shortage unlike if they receive it at the time of cultural events we conclude that the cost effectiveness of pes in regions with the above mentioned characteristics can be increased by selecting the appropriate timing to pay ecosystem service providers

how not to pay field experimental evidence on the design of redd payments abstract payments for ecosystem services pes can use many design features we investigate the impact of payment conditionality types i e different specifications when to pay and when not to pay for pes on deforestation and agricultural production in a lab in the field experiment our experiment also tests variations in contract period and payment volatility we designed a highly visual simulation game to characterize the decision situation of a cattle rancher in brazil the player can expand extensive pasture by deforestation or intensify existing pasture the model includes both a land and a capital constraint we applied the game in an economic framed lab in the field experiment in tocantins brazil payments conditional on forest carbon stock lead to slow but steady deforestation while payments conditional on forest carbon stock change suppressed deforestation more strongly but payments conditional on stock increase cattle production while payments conditional on stock change have no effect on production thus depending on the level of leakage either type of conditionality can be more cost effective in reducing global carbon emissions contracts with limited periods lead to strong deforestation after the end of the payment period payment volatility had no significant effect

conditional cash transfers and payments for environmental services a conceptual framework for explaining and judging differences in outcomes we develop a conceptual framework elucidating the main determinants of the impact of conditional cash transfer cct and payments for environmental services pes programs using a simple multi agent model and evaluations of existing programs we show that 1 the share of the population who would meet the program s conditions in the absence of payments is a powerful predictor of program efficiency and that 2 program efficiency is eroded by selection bias people who already meet conditions self select into the programs at higher rates than others we then discuss possibilities for increasing efficiency and criteria for evaluating and choosing between ccts pes or other policy instruments

evaluating the performance of benefit transfer an empirical inquiry abstract benefit transfers are used by public agencies needing information on costs and benefits of policy decisions although scientific debate regarding the validity of benefit transfer is ongoing this article develops a methodology to evaluate the performance of direct benefit transfer and benefit function transfer and applies the methodology to two pairs of similar non market amenities empirical results indicate that benefit function transfer is more robust than transfer of average site benefits our results suggest that the circumstances under which benefit function transfer provides valid policy relevant information may be limited and that errors from applying benefit transfer can be quite large even across seemingly similar amenities

imperfect competition in bank retail markets deposit and loan rate dynamics and incomplete pass through this paper examines determinants of pass through from the market interest rate to bank retail deposit and loan rates a dynamic adjustment cost model with imperfect competition implies that these rates depend on own lagged values and on lagged current and expected future values of the security rate greater competition in retail markets reduces the impact of lagged and expected rates on current retail rates while raising the effect of the current security rate yielding greater pass through these results have important implications for both the specifications used in empirical work and biases introduced into estimates of pass through effects

payments for environmental services in costa rica costa rica pioneered the use of the payments for environmental services pes approach in developing countries by establishing a formal country wide program of payments the psa program the psa program has worked hard to develop mechanisms to charge the users of environmental services for the services they receive it has made substantial progress in charging water users and more limited progress in charging biodiversity and carbon sequestration users because of the way it makes payments to service providers using approaches largely inherited from earlier programs however the psa program has considerable room for improvement in the efficiency with which it generates environmental services with experience many of these weaknesses are being gradually corrected as the psa program evolves towards a much more targeted and differentiated program an important lesson is the need to be flexible and to adapt to lessons learned and to changing circumstances

direct conservation payments in the brazilian amazon scope and equity implications abstract this article looks into the scope and equity implications of applying payments for environmental services pes as a redd implementation mechanism in the brazilian amazon we establish a set of economic and institutional preconditions for pes to become a feasible and cost effective conservation mechanism we proceed with a macro scale spatial analysis and overlay of opportunity costs deforestation patterns carbon services and land tenure in order to assess where these conditions hold we then screen how the benefits of potential pes schemes might be distributed across different socioeconomic groups of service providers in different land tenure categories our economic quantitative analysis though sensitive to documented assumptions suggests that under current carbon prices the economic preconditions are in place to pay for avoided deforestation in over half of threatened forests over the next decade unfortunately the same optimism does not apply to institutional preconditions land grabbing insecure tenure overlapping claims and lacking information on private tenure constitute real medium term impediments to pes if payments were to accrue to current landholders regardless of current tenure insecurities large landowners who account for about 80 of all deforestation would reap the highest benefits though per capita benefits other tenure categories are also high schemes that closely align payments with opportunity costs are preferable for cost effectiveness and not necessarily more inequitable in outcomes essentially pes systems cannot substitute command and control measures the former depend on the latter for basic governance systems to secure effective rights of exclusion which land stewards essentially need in order to become reliable service providers

paying for the hydrological services of mexico s forests analysis negotiations and results abstract mexico faces both high deforestation and severe water scarcity the payment for hydrological environmental services psah program was designed to complement other policy responses to the crisis at the interface of these problems through the psah the mexican federal government pays participating forest owners for the benefits of watershed protection and aquifer recharge in areas where commercial forestry is not currently competitive funding comes from fees charged to water users from which nearly us 18 million are earmarked for payments of environmental services applicants are selected according to several criteria that include indicators of the value of water scarcity in the region this paper describes the process of policy design of the psah the main actors involved in the program its operating rules and provides a preliminary evaluation one of the main findings is that many of the program s payments have been in areas with low deforestation risk selection criteria need to be modified to better target the areas where benefits to water users are highest and behavior modification has the least cost otherwise the program main gains will be distributive but without bringing a pareto improvement in overall welfare

an empirical study of joint production and scale economies in commercial banking this paper utilizes the translog cost function to test the proposition that the bank productionfunction is characterized by jointness the cross section analysis for the years 1973 through 1978 indicates that bank production is in fact characterized by jointness this result calls into question the findings and implications of studies that utilize the assumption of non jointness in production since virtually all of the major bank cost studies employ the assumption of nonjointness the second part of our analysis examines scale economies for the banking firm while allowing for jointness in production our estimates indicate that scale economies characterize bank production at only small bank sizes and that the cost structure of large banks is characterized by diseconomies of scale

the evolution of top incomes in an egalitarian society sweden 1903 2004 this study presents new homogenous series of top income shares in sweden over the period 1903 2004 we find that starting from levels of inequality approximately equal to those in other western countries at the time the income share of the swedish top decile drops sharply over the first eighty years of the twentieth century most of the decrease takes place before the expansion of the welfare state and by 1950 swedish top income shares were already lower than in other countries the fall is almost entirely due to a dramatic drop in the top percentile explained mostly by decreases in capital income while the lower half of the top decile consisting mainly of wage earners experiences virtually no change over this period in the past decades top income shares evolve very differently depending on whether capital gains are included or not when included sweden s experience resembles that in the u s and the u k with sharp increases in top incomes excluding capital gains sweden looks more like the continental european countries where top income shares have remained relatively constant a possible interpretation of our results is that sweden over the past 20 years has become a country where it is more important to make the right financial investments than to earn a lot to become rich

can payments for environmental services help reduce poverty an exploration of the issues and the evidence to date from latin america summary this paper examines the main ways in which payments for environmental services pes might affect poverty pes may reduce poverty mainly by making payments to poor natural resource managers in upper watersheds the extent of the impact depends on how many pes participants are in fact poor on the poors ability to participate and on the amounts paid although pes programs are not designed for poverty reduction there can be important synergies when program design is well thought out and local conditions are favorable possible adverse effects can occur where property rights are insecure or if pes programs encourage less labor intensive practices 2004 elsevier ltd all rights reserved

how progressive is the u s federal tax system a historical and international perspective this paper provides estimates of federal tax rates by income groups in the united states since 1960 with special emphasis on very top income groups we include individual and corporate income taxes payroll taxes and estate and gift taxes the progressivity of the u s federal tax system at the top of the income distribution has declined dramatically since the 1960s this dramatic drop in progressivity is due primarily to a drop in corporate taxes and in estate and gift taxes combined with a sharp change in the composition of top incomes away from capital income and toward labor income the sharp drop in statutory top marginal individual income tax rates has contributed only moderately to the decline in tax progressivity international comparisons confirm that is it critical to take into account other taxes than the individual income tax to properly assess the extent of overall tax progressivity both for time trends and for cross country comparisons the pattern for the united kingdom is similar to the u s pattern france had less progressive taxes than the united states or the united kingdom in 1970 but has experienced an increase in tax progressivity and has now a more progressive tax system than the united states or the united kingdom

lifetime incidence and the distributional burden of excise taxes this implies that low income households in one year have some chance of being higher income households in other years and significantly affects the estimated distributional burden of excise taxes this paper shows that household expenditures on gasoline alcohol and tobacco as a share of total consumption a proxy for lifetime income are much more equally distributed than expenditures as a share of annual income from a longer horizon perspective excise taxes on these goods are therefore much less regressive than standard analyses suggest this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item

the insurance value of state tax and transfer programs abstract this paper estimates the total value that individuals derive from their state s tax and transfer program and shows how this value varies by income the paper decomposes this total value into two components redistributive value which is due to predictable changes in income and family circumstances and insurance value which occurs when taxes and transfers compensate for unexpected income shocks our approach is a forward looking one where we examine income and transfers net of taxes over a 10 year period we model state taxes personal income taxes the eitc and sales taxes and state means tested transfers afdc tanf and medicaid schip the calculations are made using the panel study of income dynamics and allow for analysis of the role of changes in tax and transfer programs demographics and income in the value of state net benefits over a period of more than 30 years we find that the redistributive value of state tax and transfer programs sharply declines with income but that the insurance value is increasing in income the resulting total value still declines with income but not nearly as sharply as the redistributive value hence the insurance value mitigates the incentives for mobility that would undo state redistributive spending

taking stock a comparative analysis of payments for environmental services programs in developed and developing countries abstract payments for environmental services pes are an innovative approach to conservation that has been applied increasingly often in both developed and developing countries to date however few efforts have been made to systematically compare pes experiences drawing on the wealth of case studies in this special issue we synthesize the information presented according to case characteristics with respect to design costs environmental effectiveness and other outcomes pes programs often differ substantially one from the other some of the differences reflect adaptation of the basic concept to very different ecological socioeconomic or institutional conditions others reflect poor design due either to mistakes or to the need to accommodate political pressures we find significant differences between user financed pes programs in which funding comes from the users of the es being provided and government financed programs in which funding comes from a third party the user financed programs in our sample were better targeted more closely tailored to local conditions and needs had better monitoring and a greater willingness to enforce conditionality and had far fewer confounding side objectives than government financed programs we finish by outlining some perspectives on how both user and government financed pes programs could be made more effective and cost efficient

competitive interest payments on bank deposits and the long run demand for money reply this paper tests two assumptions made in previous demand for money studies the first assumption concerns the role assigned to the interest rate in the demand for money function common practice identifies the rate of interest with the opportunity cost of holding money in section i this formulation is shown to blur an important distinction between the price of money and the price of money substitutes and to implicitly assume that the relevant price variable is the difference between these two distinct prices a second assumption is that the current ban on interest payments on demand deposits is fully effective in section ii i operationally define these price variables and estimate perfectly competitive interest payments on commercial bank deposits this is done by crudely measuring commercial bank marginal costs and assuming that all excess profit is passed on to depositors in indirect ways section iii presents estimates of a more complete longrun demand for money relationship which explicitly includes an own price and a cross price as separate influences and assumes that the prohibition of the payment of interest on deposits is totally ineffective although no firm conclusion is reached concerning the proper functional specification of the demand function the results significantly improve upon previous demand for money estimates which assumed that the interest payment prohibition is totally effective in section iv the results are summarized and implications of the analysis for monetary theory are presented my competitive demand for money formulation leads to a reinterpretation of the existing evidence on what is generally referred to as the interest elasticity of demand for money this estimate is shown to be significantly biased downward it also implies that the demand for and supply of money are more interdependent than is usually assumed

bank market structure and monetary control financial innovations and regulatory actions together have acted to produce sweeping changes in the u s financial environment much of the recent literature in the area of money and banking has been concerned with the implications of these developments for monetary policy however one major aspect of this issue which has been relatively ignored is the relationship between the competitive structure of banking markets and the capability of the federal reserve to exercise control over its intermediate or ultimate policy goals given that deregulation of banking and various forms of financial innovations e g technological innovations in the provision of financial services the proliferation of various near money financial assets and the growth of nonbank financial intermediaries have altered the competitive environment in banking it seems clear that this relationship should be investigated two previous efforts to examine the monetary policy implications of different bank market structures are aftalion and white 1977 and vanhoose 1983 in each of those papers the short run real sector effects of potential policy instruments under the structural extremes of perfect competition and monopoly are derived and contrasted however the analysis in each case is based upon models in which perfect certainty is assumed and no interactions are allowed between the real and

the effectiveness of payments for environmental services we adopt a theory based approach to synthesize research on the effectiveness of payments for environmental services in achieving environmental objectives and socio economic co benefits in varying contexts our theory of change builds on established conceptual models of impact pathways and highlights the role of 1 contextual dimensions e g political institutional and socio economic conditions spatial heterogeneity in environmental service values and provision costs and interactions with pre existing policies and 2 scheme design e g payment type and level contract length targeting and differentiation of payments in determining environmental and socio economic outcomes to shed light on the overall effectiveness of payment schemes and its determinants we review counterfactual based empirical evaluations comparative analyses of case studies and meta analyses our review suggests that program effectiveness often lags behind the expectations of early theorists however we also find that theory has advanced sufficiently to identify common reasons for why payment schemes fail or succeed moreover payment schemes are often rolled out along with other policy instruments in so called policy mixes advances in theory and evaluation research are needed to improve our understanding of how such policy mixes interact with the targeted social ecological systems 2017

monetary policy in a model with a federal funds market fixed versus flexible deposit rates this paper examines the comparative static effects of various monetary policy instruments under the assumption of a market determined interest rate on demand deposits and alternatively for the case of an exogenously fixed demand deposit rate in both cases monetary policy effects are analyzed where the monetary policy operating target is either the federal funds rate or a reserve aggregate the aim of the paper is to assess the differences in monetary policy effects for each operating procedure between the flexible and fixed deposit rate cases we extend previous analyses of this subject by incorporating an explicit federal funds market in our model and providing a detailed analysis of monetary policy with a federal funds rate operating target with both a flexible and a fixed deposit rate additionally we consider the differences in the role of secondary monetary policy instruments such as the discount rate and the required reserve ratio in the different regimes finally the paper considers the implications of flexibility of the deposit rate for the feasibility of the current monetary policy strategy of using a short run operating target either the federal funds rate or a reserve aggregate to attain target

some calculations of lifetime tax incidence this paper reports a set of lifetime tax incidence calculations using a life cycle simulation model for canada due to davies 1979a 1982 a repeatedly stated qualification to annual calculations in the empirical tax incidence literature is that it would be more satisfactory to make calculations on a lifetime basis even though it is acknowledged that lifetime tax incidence could well differ from annual it is widely believed that data and other difficulties make such calculations next to impossible indeed the widespread acceptance of the data problems of lifetime calculations seems also to have inhibited speculation about how lifetime tax incidence might differ from annual as a result redistributive tax policy judgments continue to be based on annual incidence calculations in spite of the reservations many have about their usefulness our paper is intended to reorient discussion towards lifetime tax incidence by providing some initial null hypotheses about the shape of lifetime tax profiles our main finding is that under the standard competitive assumptions common in the incidence literature lifetime and annual incidence calculations both produce mild progression in tax rates across household deciles ignoring the bottom decile in the annual calculation while the income tax is less progressive in lifetime than in annual calculations other taxes are for the most part less regressive also lifetime incidence calculations are much more robust to alternative shifting assumptions than annual calculations in the lifetime context key distributions such as earnings transfer payments and consumption are less heavily concentrated in particular percentiles of the population than is true in annual data as a result changing the allocative series for any particular tax does not have the large effect on incidence results found in annual calculations each component of the tax system is allocated to households grouped by lifetime income using particular distributive series following a procedure similar to that employed in annual incidence calculations for example richard musgrave et al 1974 joseph pechman and benjamin okner 1974 edgar browning and william johnson 1979 w irwin gillespie 1980 in the process we are able to compare lifetime and annual incidence calculations using the same data set in both lifetime and annual calculations we allocate five groups of taxes among households using distributive series which come partly from the 1971 statistics canada survey of consumer finances scf and partly from our life cycle simulation model the scf data are used to construct synthetic longitudinal lifetime profiles of earnings and transfer payments for a sample of 500 households the latter are assigned inheritances by simulating patterns of mortality and bequest these data are then used in the life cycle model to generate lifetime consumption profiles and bequests the earnings transfer and inheritance data plus the model output provide the distributive series on which alternative incidence calculations are based while the incidence calculations presented in this paper use canadian data results would likely be similar for the united states

targeting redd an empirical analysis of carbon sequestration in indonesia summary the implementation of redd requires knowledge of the willingness to accept land use change contracts and its application over large areas this paper uses primary data from indonesia to contrast two approaches to the elicitation of the supply curve for carbon an auction and an analysis of opportunity costs the analysis shows that there are important differences between the two approaches for a wide range of prices an analysis of bidding behavior shows that location and individual preferences time and risk preferences but not opportunity costs play a significant role in this decision the implications for targeting are discussed

agri environmental schemes adverse selection information structure and delegation this work analyzes alternative designs of agri environmental schemes and how different incentive mechanisms impact on their overall efficiency it focuses on spatial targeting and delegation in an asymmetric information context first the optimal contract under adverse selection is modeled this model underlines the trade off between information rents and allocative efficiency the impact of spatial targeting is then addressed disaggregated information structures increase the optimal efforts asked of the farmers it may also involve higher information rents and may reduce the net contributions of some farmers finally the consequences of delegating authority within the principal agent relationship are investigated the results illustrate that spatial targeting and delegation when combined have asymmetric impacts on farmers payoffs

deregulation and oligopolistic rivalry in bank deposit markets abstract this paper provides a partial equilibrium analysis of a deregulated market for bank deposits in which banks behave oligopolistically but entry and exit are freely permitted it is demonstrated that the effects of variations in market interest rates reserve requirements and bank cost and demand conditions upon the market quantity of bank deposit money are fundamentally altered if the degree of bank rivalry adjusts endogenously hence banking deregulation may produce significant changes in the relationships between these variables and the stock of deposit money

aligning public good environmental stewardship with the landscape scale adapting mbis for private land conservation policy market based instruments mbis are rapidly becoming a dominant characteristic of the policy landscape for private land conservation in australia and elsewhere price based mbis are considered attractive to landholders who are provided with financial payments for the delivery of defined ecological outcomes on their land and for policy making where ecological return on investment can be measured quantitatively consequently mbis are commonly used to promote competitive individualized approaches to improve ecological values framed around the property scale we are concerned that there is a tension between the property centric focus of price based mbi programs and the need for environmental management policy and practice to reflect landscape scale social ecological processes targeting mbi programs at individual properties could risk generating insufficient public good conservation benefits if those programs fail to reflect the relationship between landscape scale processes and property scale conservation efforts to remedy the neglect of the landscape scale in private land conservation mbi policy we develop a definition of stewardship that directly connects landscape scale ecological function to the public good dimension of stewardship we apply this over arching definition to demonstrate how mbi programs can deliver on the goal of landscape scale conservation and to suggest when mbis might not be well suited to achieving private land conservation objectives