asymmetry in retail wholesale and shipping point pricing for fresh vegetables the linkage among retail wholesale and shipping point prices for a select group of fresh vegetables is measured using wolffram s asymmetry model procedures for dealing with discontinuous time series are shown and granger s causality test is used to show the direction of the price linkage wholesale prices are shown to lead both retail and shipping point prices asymmetry in the retail wholesale response indicates that wholesale price decreases are reflected at the retail more so than are wholesale price increases wholesale price decreases are more fully passed through to the shipping point relative to wholesale increases

revealed social preferences of dutch political parties we measure the redistributive preferences of dutch political parties using unique detailed information from their election proposals by employing the inverse optimal tax method we calculate the political weights across the income distribution for each political party we find that all dutch political parties give a higher political weight to middle incomes than to the poor moreover the political weights of the rich are close to zero furthermore we detect a strong political status quo bias as the political weights of all political parties hardly deviate from the weights implied by the pre existing tax system we argue that political economy considerations are key in understanding these results

scale economies and consolidation in hog slaughter we use establishment based panel data to estimate a cost function which identifies the role of scale economies in hog slaughter consolidation we find modest but extensive technological scale economies in the 1990s and they became more important over time but wages rose sharply with plant size through the 1970s and those wage premiums generated a pecuniary scale diseconomy that largely offset the effects of technological scale economies the size wage relation disappeared in the 1980s with growing technological scale economies and disappearing pecuniary diseconomies large plants realized growing cost advantages over smaller plants and production shifted to larger plants copyright 2000 oxford university press

comparative statics analysis of a fully closed city abstract this paper extends the existing comparative statics analysis about open or semiclosed cities notably that of w wheaton j econom theor 9 2 223 237 1974 to a fully closed city where urban land rent is redistributed to the city population specifically we examine the effects on changes in exogenous variables such as population size agricultural rent and initial endowments on endogenous variables such as welfare level city size and rent schedule most but not all of the existing results are reestablished surprisingly it is shown that in contrast to the existing literature and perhaps to intuition the city area may shrink when the city population increases the paper also extends the existing literature by analyzing the effect of the exogenous variables on the endogenous income and the demand for transportation it is shown that under plausible assumptions the quantity of transportation demanded declines with its price

tax planning of married couples and intra household income inequality abstract this paper examines tax planning of married couples under separate taxation it shows that concerns about the intra household income distribution prevent couples from minimizing tax payments the empirical analysis exploits a specific feature of the german tax system which allows married couples to save taxes by deviating from the default symmetric payroll tax treatment and assigning favorable tax treatment to the primary earner and unfavorable tax treatment to the secondary earner based on a representative random sample of individual tax files we find that a couple is less likely to choose the tax minimizing treatment if tax planning is associated with a larger decline of the net of tax income of the secondary earner this applies regardless of whether the husband or the wife is the main earner however couples where the wife is the main earner are generally more reluctant to assign the more favorable tax treatment to the wife

individual versus joint taxation in models with household production in a recent paper piggott and whalley 1996 challenge the conventional wisdom that says that the individual rather than the household should be the unit of taxation and argue instead for joint taxation their point of departure is a point well taken the literature on which this wisdom is based in particular boskin and sheshinski 1983 ignores the existence of household production the general argument is a nice one in the theory of the second best in the absence of taxation of market wage income the marginal rates of technical substitution between primary and secondary labor in market and in household production would be equal to each other and the marginal rate of substitution between the market and household good would be equal to the marginal rate of transformation between them thus achieving pareto efficiency introduction of income taxation leads to a distortion of the relation between the marginal rate of substitution and the marginal rate of transformation which is the focus of concern in the literature 2 and given the differing econo

pigou meets ramsey gender based taxation with non cooperative couples abstract this paper explores the implications of gender based income taxation in a non cooperative model of household behavior in a first step we show how gender based taxes can act as pigou taxes and correct the externality induced by a non cooperative household equilibrium we find that the first best pigou tax rules are solely determined by spouses relative marginal rates of substitution between the public household good and private consumption breaking down this general rule into the primitives of the model the spouse with a comparative advantage in home production should be taxed at a higher rate in a second step we embed our non cooperative framework in a standard second best planning problem in which taxes serve a revenue raising purpose in this case the optimal structure of differential taxation by gender is partly determined by a ramsey type inverse elasticity rule and partly by a pigouvian tax element we show that these two forces work in opposite directions in determining whether men or women should be taxed at a higher rate and that either one could be dominant depending on the revenue raising position of the government this result is robust to the introduction of two groups of households that differ in their mode of decision making which can be either cooperative or non cooperative

income taxation of couples spouses labor supplies and the gender wage gap abstract we study the taxation of couples when female wages do not reflect their true productivity we show that the expression for the marginal tax rates of the male spouses is the same as in a mirrleesian world where wages reflect true productivities marginal taxes for the female spouses are reduced because of a pigouvian correction consequently the wage discrimination pleads for a lower marginal tax on the female spouse furthermore the distortion of a couples tradeoff between male and female labor supply is the same as in a mirrleesian world without a gender wage gap it only depends on true productivities and not on wages in other words the tax system completely neutralizes the extra distortion introduced by the wedge between the female spouse s wage and her true productivity

the impact of supply constraints on house prices in england we test the theoretical prediction that house prices respond more strongly to changes in local earnings in places with tight supply constraints using a unique panel dataset of 353 local planning authorities in england between 1974 and 2008 exploiting exogenous variation from a policy reform vote shares and historical density to identify the endogenous constraints measures we find that regulatory constraints have a substantive positive impact on the house price earnings elasticity the effect of constraints due to scarcity of developable land is largely confined to highly urbanised areas and uneven topography has a quantitatively less meaningful impact

optimal taxation of business and individual incomes abstract this paper applies the optimal taxation approach to two versions of fisher s consumption and investment model it then shows that eliminating the business or corporation income tax through full integration of this tax with the individual income tax is non optimal by both efficiency and equity standards in the case where business investment is financed completely by borrowing the business income tax should be assigned to the goal of raising revenue efficiently and the individual tax is associated only with the equity objective

the tax unit and household production comment in a recent paper published in this journal piggott and whalley 1996 challenge the conventional wisdom that taxing individuals rather than households is preferred from an efficiency point of view p 398 they argue that once household production is taken into account things are more complicated since tax design should also not distort the input of family members time in household production they support their view by providing computational results these results seem to demonstrate that welfare can indeed be enhanced if households are taxed as a unit and not as individuals this comment sets out to show however that their analysis contains some quite critical points in our opinion if piggott and whalley s approach is followed through to its end it only enforces the conventional view piggott and whalley work with an extended family labor supply model the extension concerns household production expressed by some function n there are two model variants with different degrees of complexity in the first variant a representative household is considered and producer prices are held constant the model serves to demonstrate piggott and whalley s basic line of argumentation within a simple framework the second variant extends the first one in several respects its functional specification is more complex and it is a general equilibrium model with two household types the model is parameterized using australian tax rates and data it is shown that aggregate welfare gains can occur under well designed income tax reforms the reforms are such that the individual tax base is replaced with a household tax base additionally average and marginal tax rates are proportionally adjusted to preserve revenue

price dynamics in a vertical sector the case of butter we develop a reduced form model of price transmission in a vertical sector allowing for refined asymmetric contemporaneous and lagged own and cross price effects under time varying volatility the model is used to investigate the wholesale retail price dynamics in the u s butter market the analysis documents the nature of nonlinear price dynamics in a vertical sector it finds strong evidence of asymmetric retail price responses both in the short term and the longer term but only weak evidence of asymmetric wholesale price responses asymmetric retail responses play a major role in generating a skewed distribution of butter prices the empirical results indicate the presence of imperfect competition at the retail level

price cycles and asymmetric price transmission in the u s pork market economists have proposed several plausible explanations for observed price transmission asymmetries in commodity markets unfortunately the econometric methods commonly used in such studies cannot empirically distinguish pricing behavior under the competing theories we argue that the theories may be classified by firm responses to high and low frequency price cycles and use engle s band spectrum regression to test the symmetry of high and low frequency cycles in weekly pork prices the findings indicate that changes in wholesale prices are asymmetrically transmitted to retail prices in relatively low frequency cycles which does not support search costs and other high frequency explanations conversely wholesale pork prices asymmetrically adjust to changes in farm prices at all frequencies copyright 2001 oxford university press

optimal tax treatment of the family married couples abstract this paper examines the appropriate tax treatment of the family in a series of analytical models and numerical examples for a population of taxpaying couples which differ in earning capacity we drive the optimal tax rates for each potential earner these rates depend crucially upon own and cross labor supply elasticities and the joint distribution of wage rates our results suggest that the current system of income splitting in the united states under which husbands and wives face equal marginal tax rates is nonoptimal using results from recent econometric studies and allowing for a sensitivity analysis the optimal tax rates on secondary workers in the family are much lower than those on primary earners indeed our best estimate is that the secondary earner would face tax rates only one half as high as primary earners

cointegration and threshold adjustment this article proposes an extension to the engle granger testing strategy by permitting asymmetry in the adjustment toward equilibrium in two different ways we demonstrate that our test has good power and size properties over the engle granger test when there are asymmetric departures from equilibrium we consider an application namely whether there exists cointegration among interest rates for instruments with different maturities this issue has been widely tested with mixed results we argue that either cautious policy or possibly opportunistic behavior on the part of the federal reserve implies that an equilibrium relationship between short and long term interest rates exists but that adjustments from disequilibrium are asymmetric in nature empirical tests using u s yields confirm the asymmetric nature of error correction among interest rates of different maturities

household bargaining and the design of couples income taxation this paper studies the design of couples income taxation when consumption and labor supply decisions within the couple are made by maximizing a weighted sum of the spouses utilities bargaining weights are given but specific to each couple information structure and labor supply decisions follow the mirrleesian tradition however while the household s total consumption is publicly observable the consumption levels of the individual spouses are not observable with a utilitarian social welfare function we show that the expression for a spouses marginal income tax rate includes a pigouvian paternalistic and an incentive term the pigouvian term favors a marginal subsidy tax for the high weight low weight spouse whose labor supply otherwise tends to be too low high the sign and the magnitude of the incentive term depends on the weight structure across couples in some cases both terms have the same sign and imply a positive marginal tax for the low weight spouse who may be female and a negative one for the high weight spouse possibly the male this is at odds with the traditional boskin and sheshinski results our conclusions can easily be generalized to more egalitarian welfare functions finally we present numerical simulations based on a calibrated specification of our model the calculations confirm that the male spouse may well have the lower and possibly even negative marginal tax rate

for love or money the impact of income taxes on marriage higher sometimes lower than their combined single income tax obligations in this paper we explore the impact of the federal individual income tax as well as other economic and demograplhic variables on the marriage decisionis of individuals using longitudinal data from the panel study on income dynamics for the period 1968 92 we estimate a discrete time hazard model of the time to first marriage we find that the probability of marriage is significantly affected by a range of economic and demographic variables importantly we find that an increase in total income taxes paid by married versus single women has a negative effect on the likelihood of marriage and that the change in the marginal tax rate is also a significant determinant of marriage in some cases in contrast the tax effects are rarely significant in determining marriage probabilities among men although there are some differential responses by race in general the impacts of the income tax variables even when statistically significant are small

precaution and liquidity in the demand for housing we exploit cross sectional mortgage data to investigate the importance of liquidity constraints and a precautionary motive in the demand for housing households that are not liquidity constrained consume housing services essentially as the life cycle hypothesis suggests but with a significant precautionary component households that are liquidity constrained in terms of not meeting standard loan to value or payments to income constraints are similar to unconstrained households in most respects including the precautionary motive but they respond somewhat less to fluctuations in their lifetime income suggesting some influence of bank induced liquidity constraints we additionally find however that banks enforce liquidity constraints only weakly jel d91 d12 r21 i introduction the benchmark theory in the economics of consumption is the life cycle or permanent income hypothesis lcpi based on the work of modigliani and brumberg 1954 and friedman 1957 its empirical validity is sometimes questionable especially when compared against alternatives that incorporate liquidity constraints or the precautionary motive for saving see for instance deaton 1992 for a survey rejection of the lcpi may however be just a manifestation of the poor quality of consumption data at the micro level these data are typically subject to the reporting biases and omissions inherent in consumer surveys there are further difficulties in measuring a desired stream of consumption services nondurable consumption goods are a small fraction of total consumption and in the case of food essentials hardly a consumer choice variable durable consumption goods have the feature that they are lumpy and that the consumption services at any point in time are hard to measure we propose to test the lcpi at the micro level with a quite different type of data the data are obtained from the residential mortgage finance database collected by the national association of realtors they are based on actual home purchases and the associated mortgage transactions reported by realtors and thus avoid some of the reporting biases of the consumer surveys more important they allow us to accurately identify households that in principle have instantaneous access to additional liquidity by lowering the down payment for the house purchase or increasing the size of the loan further the purchase of a house provides an accurate measure of a relatively large fraction of consumption services obtained for a medium to long horizon and measured at the time of the consumption decision although our data also have some serious shortcomings they allow a look at the lcpi from an unconventional vantage point perhaps the most influential study employing the standard consumer survey in testing the lcpi at the micro level is that of hall and mishkin 1982 it examines food expenditure from the panel study of income dynamics one of their key results is that consumption tracks income more closely than would be expected under the lcpi they demonstrate that this result could be explained by assuming a group of liquidity constrained consumers consuming their income at each point in time of 20 of the total sample some of the drawbacks of this study are the use of food expenditures to represent consumption the underreporting of income and absence of proper wealth data inherent in the consumer survey and the associated inability to individually separate liquidity constrained consumers from the rest of the sample several previous studies have attempted to improve on this way of testing the lcpi by examining other data sets bernanke 1984 used data on durable consumption goods automobiles to overcome the drawbacks of using food consumption in the hall and mishkin study his results support the lcpi but are still suspect because of possible reporting biases and the lack of good wealth and savings observations

asymmetry and rigidity in farm retail price transmission this article demonstrates how retail price transmission asymmetry can arise from intertemporal optimizing behavior among spatially competitive retailers facing concave spatial demand and shows that vigorous competition among retailers may not necessarily result in the larger retail price declines farmers expect during periods of declining farm prices it also shows that when this particular class of retailers incurs repricing costs retail prices can be rigid over a range of upward and downward movements in the farm price this suggests that the rigidity of retail prices during periods of declining farm prices could be due to repricing costs it also suggests that the appropriate econometric model of price transmission is the model of friction where tobit analysis is the proper method of estimation rather than nonreversible functions

effects of urban transportation system change on land prices in the setting of owner occupied residence abstract the purpose of this study is to analyze the impact of transportation improvement on the land development process and land price structure in an owner occupied residence setting a dynamic model of household and landowner in which the role of land as an asset is explicitly considered is presented and the process of land development and land price change after the announcement of transportation improvement is investigated during the period between the announcement and the completion of urban transportation improvement it is observed that the price of the land that is presently used for agriculture but will be developed in the future is higher than the agricultural land price

on the taxation of trade within and between households abstract tax reform proposals affect individual welfares in ways which strongly depend on the nature of specialisation in household production and the pattern of trade within households variation in the degree of specialisation in domestic production across households strongly influences the impacts on individual tax burdens of a given tax reform the standard models of the economics literature cannot be used to analyse these issues because they ignore the two person nature of households and the existence of household production and trade this paper proposes a simple and tractable model to remedy this and uses it to analyse the impacts of the types of tax reform that have been the subject of recent policy debate

until taxes do us part tax penalties or bonuses and the marriage decision the tax regimes applied to couples in many countries including the us france and germany imply either a marriage penalty or a marriage bonus we study how they affect the decision to get married by considering two potential spouses who play a marriage proposal game at the end of the game they may get married live together without formal marriage or split up in this signaling game proposing or getting married is costly but can indicate strong love the striking property we obtain is that a marriage bonus may actually reduce the probability that a couple gets married if the bonus is sufficiently large the signaling mechanism breaks down and only a pooling equilibrium in which fewer couples get married remains similarly a marriage penalty may increase the marriage probability specifically the penalty may lead to a separating equilibrium with efficiency enhancing information transmission which was otherwise not possible our results also imply that marriage decisions in the laissez faire are not necessarily privately optimal in some cases a bonus or a penalty may effectively make the marriage decision more efficient it may increase the number of efficient marriages that otherwise may not be concluded

a comparative static analysis of urban structure in the setting of endogenous income abstract wheaton j econom theory 9 223 237 1974 thoroughly did a comparative static analysis of urban spatial structure for both the closed and the open city models his analysis presupposed the simple alonso type city model where per capita income is treated as an exogenous variable however in some research including that of wheaton amer econom rev 67 138 143 1977 and sasaki and co workers the land rent payment is distributed to each citizen and thereby per capita income is determined endogenously treating income level as endogenous makes a comparative static analysis so complicated that the sign of the effects is indeterminate without specifying a utility function in some cases and cannot be determined even with a specific utility function in some cases this paper performs a comparative static analysis in the setting of endogenous income and thereby clarifies which impacts cannot be qualitatively assessed until a utility function is specified

income splitting among the self employed under individual taxation with progressive marginal tax rates households in which the distribution of income is unequal benefit from attributing income to the lower income household member self employment provides greater potential to split income in this way because of the absence of a third party reporting income using the canadian experience as a case study this paper develops a unique estimator of the incidence of illegal income splitting among self employed couples the results suggest that the incidence of income splitting among self employed men in canada is non trivial but no evidence is found that self employed women attribute income to their spouses jel classification h26 h21 h31 j22 le fractionnement du revenu chez les travailleurs autonomes dans un regime fiscal qui a des taux marginaux d imposition progressive des revenus les membres d un menage dans lequel la repartition des revenus n est pas g rien n indique que les femmes qui sont travailleurs autonomes attribuent une portion de leurs revenus a leur epoux

flat income taxation redistribution and labour market performance a flat tax rate on labour income has gained popularity in european countries this article assesses the attractiveness of such a flat tax in achieving redistributive objectives with the smallest distortions to employment we do so by using a detailed applied general equilibrium model for the netherlands the model is empirically grounded in the data and encompasses decisions on hours worked labour force participation skill formation wage bargaining between unions and firms and a wide variety of institutional details the simulations suggest that the replacement of the current tax system in the netherlands by a flat rate will harm labour market performance if aggregate income inequality is contained only flat tax reforms that reduce redistribution will raise employment this finding bolsters the notions from optimal tax literature regarding the equity efficiency trade off and the superiority of nonlinear taxes to obtain redistributive goals in an efficient way

family specific investments and divorce with dynamically inconsistent households marital contracts and policy abstract this paper bridges two distinct areas of inquiry the economic theory of the family and behavioral research on time inconsistent preferences motivated by anecdotal and survey evidence suggesting that present bias plays a role in intra household decision making we propose a model in which hyperbolic discounting couples engage in home production activities thereby accumulating family specific capital over time at any given point in time the gains to continued marriage depend on the accumulated stock of this capital and a temporary random shock to match quality couples whose match quality deteriorates may choose to divorce and this is more likely to happen if past investments in family specific capital have been low we obtain three main sets of results first present biased preferences induce couples to underinvest in family specific capital and to overdivorce second sophisticated couples but not naive ones may choose to enter marriage on terms which make divorce more costly to obtain third the inefficiencies in the behavior of time inconsistent couples can be completely undone by means of earnings and divorce taxes that vary over the marital life cycle

extreme dependence in price transmission analysis abstractwe propose a generalized procedure that combines conventional price transmission analysis with copula based dynamic tail dependence to examine price relationships under extreme conditions this approach is used to examine ukrainian wheat markets where export restrictions combined with price surges 2006 2008 and 2010 2012 have contributed to a turbulent market the results indicate that domestic prices were effectively insulated from world price shocks but that a rocket and feathers price relation held between domestic flour and wheat prices these asymmetric price co movements changed with the degree of restrictiveness of the export prohibitions

housing as an asset and the effects of property taxation on the residential development process abstract a model of residential development is constructed recognizing the asset side of land and housing the equilibrium process is characterized under the perfect foresight assumption and the effects of a capital gains tax both unanticipated and anticipated and a tax on property values are examined

taxation and the household abstract previous analyses of demand systems and the welfare effects of taxing male and female labour supplies suppress the analysis of household resource allocation by assuming a household utility function to analyse the implications of assuming this is not the case we construct a simple but fairly general model of household resource allocation and use the properties of the equilibrium of this model to characterise the effects of tax policy on individual utilities as determined by the household resource allocation process

taxation and the earnings of husbands and wives evidence from sweden i examine the response of husbands and wives earnings to a tax reform in which husbands and wives tax rates changed independently allowing me to examine the effect of both spouses incentives on each spouse s behavior i analyze the large swedish tax reform of 1990 1991 and find that in response to a compensated fall in one spouse s tax rate each spouse s earnings rise i compare these results to those of simplified econometric models used in the typical setting in which independent variation in each spouse s tax rate is unavailable i find that standard econometric specifications may produce substantially biased estimates

price transmission and asymmetric adjustment in the u s beef sector the u s livestock sector has experienced numerous structural changes in recent years for example the meatpacking industry has experienced many mergers and acquisitions leading to significant increases in industry concentration in particular the four firm concentration ratio for steer and heifer slaughter a frequently cited statistic and an important indicator of industry concentration increased from 35 7 in 1980 to 79 8 in 1997 usda there have also been significant regional shifts in livestock production and changes in marketing practices with decreased use of public markets in many areas for some products traditional auction markets have been largely replaced by contract production and sales cattle inventories have also trended downward over the last two decades this has been accompanied by decreases in the number of producers and in some cases with significant increases in the scale of operations the vertical transmission of shocks among various levels of the market is an important characteristic describing the overall operation of the market of course price is the primary mechanism by which various levels of the market are linked the extent of adjustment and speed with which shocks are transmitted among producer wholesale and retail market prices is an important factor reflecting the actions of market participants at alternative market levels the nature speed and extent of adjustments to market shocks may also have important implications for marketing margins spreads and mark up pricing practices an extensive literature has examined mar

the optimal income taxation of couples this paper analyzes the general nonlinear optimal income tax for couples a multidimensional screening problem each couple consists of a primary earner who always participates in the labor market but makes an hours of work choice and a secondary earner who chooses whether or not to work if second earner participation is a signal of the couple being better worse off we prove that optimal tax schemes display a positive tax subsidy on secondary earnings and that the tax subsidy on secondary earnings decreases with primary earnings and converges to zero asymptotically we present calibrated microsimulations for the united kingdom showing that decreasing tax rates on secondary earnings is quantitatively significant and consistent with actual income tax and transfer programs

commodity prices and unit root tests price theory suggests that commodity prices should be stationary series yet tests for unit roots rather frequently imply that these prices are not stationary this seeming inconsistency is investigated by applying alternative specifications of unit root tests to prices of corn soybeans barrows and gilts and milk the preponderance of evidence suggests that nominal prices do not have unit roots but the results are sensitive to the specification of the test equation accounting for a structural change that shifts the mean appears to be an important issue in unit root tests

the responses of youth to a cash transfer conditional on schooling a quasi experimental study summary we estimate the effect of cash transfers given to youth conditional on high school attendance on the labor supply decisions and academic performance of youth we exploit differences in the size of the total transfer received based on timing of birth to identify the causal effects of interest specifically individuals born late in a quarter receive a larger total transfer than comparable individuals born early in the following quarter we find that the transfer increases the labor market participation of youth and the number of months worked the estimated effect is larger for individuals from low income families the results suggest that some youths are borrowing constrained since we find no evidence of corresponding effects on academic performance alleviating the constraint appears only to affect consumption decisions and not human capital investment copyright 2011 john wiley sons ltd the provision of cash transfers to parents children and youth is an integral part of public policy in many organisation for economic co operation and development oecd countries however it is an open question whether cash transfers given to families is an effective way of increasing equality of opportunity as is the goal in this paper we investigate the relationship between adolescent outcomes and a publicly provided cash transfer to youth given conditional on high school attendance our contribution is twofold first we provide evidence on the effect of giving cash transfers to youth in a setting characterized by a high general transfer level and free access to education second using large administrative datasets covering the entire danish population combined with a quasi experimental setup we are able to identify the causal relation between cash transfers and adolescent behavior and outcomes

taxing women a macroeconomic analysis based on well known evidence on labor supply elasticities several authors have concluded that women should be taxed at lower rates than men we evaluate the quantitative implications and merits of this proposition relative to the current system of taxation setting a proportional tax rate on married females equal to 4 8 increases output and married female labor force participation by about 3 9 3 4 and 6 9 4 0 respectively gender based taxes improve welfare and are preferred by a majority of households nevertheless welfare gains are higher when the u s tax system is replaced by a proportional gender neutral income tax 2011 published by elsevier b v

econometric models of asymmetric price transmission abstract in this paper we review the existing empirical literature on price asymmetries in commodities providing a way to classify and compare different studies that are highly heterogeneous in terms of econometric models type of asymmetries and empirical findings relative to the previous literature this paper is novel in several respects first it presents a detailed and updated survey of the existing empirical contributions on price asymmetries in the transmission mechanism linking input prices to output prices second this paper presents an extension of the traditional distinction between long run and short run asymmetries to new categories of asymmetries such as contemporaneous impact distributed lag effect cumulated impact reaction time equilibrium and momentum equilibrium adjustment path regime effect regime equilibrium adjustment path each empirical study is then critically discussed in the light of this new classification of asymmetries third this paper evaluates the relative merits of the most popular econometric models for price asymmetries namely autoregressive distributed lags partial adjustments error correction models regime switching and vector autoregressive models finally we use the meta regression analysis to investigate whether the results of asymmetry tests are not model invariant and find which additional factors systematically influence the rejection of the null hypothesis of symmetric price adjustment the main results of our survey can be summarized as follows i each econometric model is specialized to capture a subset of asymmetries ii each asymmetry is better investigated by a subset of econometric models iii the general significance of the f test for asymmetric price transmission depends mainly on characteristics of the data dynamic specification of the econometric model and market characteristics overall our empirical findings confirm that asymmetry in all its forms is very likely to occur in a wide range of markets and econometric models

on the optimal rate structure of an individual income tax what is the optimal rate structure of a personal income tax in the literature on optimal taxation this important question has been approached by introducing a linear income tax formula into a revised ramseyian model which takes into account both efficiency and equity objectives of taxation the assumption of a linear tax enables us to examine the degree of tax progression through the behavior of the average rate but it does not throw light on how the marginal rate should vary with income 1 lecture 13 a classic paper by mirrlees 7 which was later expounded on by atkinson and stiglitz 1 412 22 solves this problem by explicitly considering a general income tax schedule however both linear and general tax formulae provide little guide for policy making since in practice the tax rates are graduated by a bracket system that is the income scale is divided into segments or brackets and rates are applied only to the income in each bracket rates increase or decrease by small percentage points from one bracket to the next in order to avoid large and abrupt changes in tax burden as income rises the present paper attempts to demonstrate how we can easily transform a segment graduated tax system into a multiple linear system and then incorporate it into the standard optimum taxation model we then proceed to derive the conditions governing the optimal value of an upper or lower limit of a tax bracket and the marginal tax rate applied to the bracket combining these conditions together will enable us to infer what the optimal rate structure should be

spatial patterns of residential development abstract a simple dynamic model of residential development with durable housing where all households are identical and all developers have perfect foresight is studied it is shown that unlike the case of static models it is quite possible that house size decreases and thus population density increases with distance from the city center and that the house rent curve has positive gradient in certain area

the effects of joint taxation of married couples on labor supply and non wage income abstract the united states changed its tax treatment of married couples in 1948 from a system in which each spouse paid taxes on his or her own income to a system in which a married couple is taxed as a unit the switch from separate to joint taxation changed incentives for labor supply and asset ownership this paper investigates the effects of the conversion to joint taxation taking advantage of a natural experiment created by cross state variation in property laws married individuals in states with community property laws had always been taxed as if each spouse had earned half of the couple s income and thus were unaffected by the 1948 legal change comparing the behavior of highly educated taxpayers in affected and unaffected states indicates that the tax change is associated with a decline of approximately 2 percentage points in the employment rate of married women consistent with the higher first dollar tax rates they faced after 1948 women married to self employed men were also less likely to have non wage income after 1948 reflecting pre 1948 allocation of family assets to wives for tax purposes the effects of joint taxation on married men s labor force participation and non wage income holding are generally not statistically significant

adjustment costs firm responses and micro vs macro labor supply elasticities evidence from danish tax records we show that the effects of taxes on labor supply are shaped by interactions between adjustment costs for workers and hours constraints set by firms we develop a model in which firms post job offers characterized by an hours requirement and workers pay search costs to find jobs we present evidence supporting three predictions of this model by analyzing bunching at kinks using danish tax records first larger kinks generate larger taxable income elasticities second kinks that apply to a larger group of workers generate larger elasticities third the distribution of job offers is tailored to match workers aggregate tax preferences in equilibrium our results suggest that macro elasticities may be substantially larger than the estimates obtained using standard microeconometric methods

partial tax reform an optimal taxation perspective this paper presents a framework for evaluating partial tax reform proposals based on the theory of optimal taxation which is complementary to an analysis based on the theory of equitable taxation developed by walter hettich in this journal the analysis focuses on the fundamentally different perspectives on tax reform of the two schools of thought never theless the two approaches are complementary in that first they require decision makers to state explicitly their views on horizontal and vertical equity and second they then provide a systematic means of evaluating partial tax reforms based on those criteria

why governments should invest more to educate girls abstract women and men often receive the same percentage increase in their wage rates with advances in schooling because these returns decline with more schooling the marginal returns for women will tend to exceed those for men especially in countries where women are much less educated the health and schooling of children are more closely related to their mother s education than father s more educated women work more hours in the market labor force broadening the tax base and thereby potentially reducing tax distortions these three conditions it is argued justify the disproportionate allocation of public expenditures toward women s education

disentangling nonlinearities in the long and short run price relationships an application to the us hog pork supply chain increased concentration at the retail food processing and farm input manufacturing levels has brought increased attention to patterns in retail to farm price spreads most studies documenting asymmetric price transmission focus on nonlinear error correction processes as opposed to the current study which analyses potential nonlinearities in the long run relationship between the farm and retail prices the null hypothesis of nonlinearity in the long run relationship between farm and retail prices in the us hog pork supply chain is rejected in favour of a smooth transition cointegration stc framework the stc framework predicts downward price stickiness in retail prices the predicted residuals of the nonlinear model are used to investigate whether it is possible to disentangle nonlinearity in the long run price relationship from nonlinearity in the adjustment towards the long run equilibrium the results underline the importance of testing for linearity in the long run price relationship before modelli

price transmission and asymmetric adjustment in the spanish dairy sector asymmetric threshold vector error correction models are applied to monthly price data to analyse price relationships and patterns of transmission among farm and retail markets for a variety of dairy products in spain the results suggest that asymmetries affect a conspicuous part of the raw milk processed in spain implications for the organizational structure of spanish dairy markets are offered

the fundamentals of land prices and urban growth abstract in a very simple model in which capital is durable and landowners have perfect foresight the price of urban land has four additive components the value of agricultural land rent the cost of conversion the value of accessibility and the value of expected future rent increases a growth premium in rapidly growing cities the growth premium may easily account for half of the average price of land and may create a large gap between the price of land at the boundary minus conversion cost and the value of agricultural land rent

optimal tax and transfer programs for couples with extensive labor supply responses this paper analyzes the optimal design of general nonlinear tax transfer schedules for couples under unitary and collective approaches to family decision making we consider a double extensive model of labor supply where each spouse makes a labor force participation choice for given hours of work we present simple and intuitive optimal tax rules that generalize existing findings on the optimal taxation of single person households with extensive responses saez 2002 to the case of two person households with double extensive responses without income effects on labor supply optimal tax rules as a function of sufficient statistics are the same under the unitary and collective approaches with income effects on labor supply optimal tax rules under the two approaches continue to depend on the same sufficient statistics but the collective model features an additional pigouvian term arising from a within family participation externality finally we present microsimulations of tax reform for 15 european countries suggesting that a reduction of tax rates on secondary earners relative to primary earners is associated with strong welfare gains in all countries

testing for the lop under nonlinearity an application to four major eu pork markets this article develops an econometric procedure to test the validity of the law of one price lop under nonlinearity and to distinguish between its strong and its weak version the procedure is applied to four major eu pork markets using weekly prices from 1991 to 2008 the empirical results suggest that the markets are well integrated with deviations from the steady state price differentials corrected nonlinearly the lop is valid for all market pairs and for the pair germany spain it holds in its strong version

using threshold cointegration to estimate asymmetric price transmission in the swiss pork market this paper employs threshold cointegration tests that allow for asymmetric adjustment towards a long run equilibrium relationship to examine the relationship between producer and retail pork prices in switzerland the short run adjustments are also examined with asymmetric error correction models that are compared to the conventional symmetric error correction models the results indicate that price transmission between the producer and retail levels is asymmetric in the sense that increases in producer prices that lead to declines in marketing margins are passed on more quickly to retail prices than decreases in producer prices that result in increases in the marketing margins

do gasoline prices respond asymmetrically to crude oil price changes the authors test and confirm that retail gasoline prices respond more quickly to increases than to decreases in crude oil prices among the possible sources of this asymmetry are production inventory adjustment lags and market power of some sellers by analyzing price transmission at different points in the distribution chain the authors attempt to shed light on these theories spot prices for generic gasoline show asymmetry in responding to crude oil price changes which may reflect inventory adjustment effects asymmetry also appears in the response of retail prices to wholesale price changes possibly indicating short run market power among retailers

reply to apps rees and gottried richter in our earlier paper in this journal 1996 we argued that in a model with both market and household production each of which has two factor inputs primary and secondary worker labor individualbased taxation will distort the factor input ratio whereas household or joint taxation which has similar tax rates for the two workers will not there is an added distortion of household production under individual taxation that does not appear in a model with only consumption of goods and leisure and in which ramsey labor supply elasticity considerations point toward individual taxation we used 1974 australian data to analyze a possible move from an existing individual based income tax to an alternative household based tax a move from a status quo separate tax regime to joint taxation we suggested that the added distortion of household production under individual taxation made such a move more likely to be welfareimproving we considered pairwise comparisons of model solutions under prevailing nonoptimal individual tax rates and common household member rates calculated in various ways our results showed that if the dispersion in individual tax rates is large enough the tax induced distortion of household production can be the dominant consideration in the comparison we neither computed nor characterized optimal tax rate configurations in this application the lessons from optimal tax design seemed uninteresting and rather trivial a de novo design of an optimal tax structure across household members would almost certainly