the poll tax origin errors and remedies this paper begins with an account of the context in which this decision was taken and of the reasons for it it will then be seen that the situation has developed so very differently from expectations that a fresh start is required the over riding objective when the new system was being devised in i984 5 was to check the persistent growth in local expenditure which had caused so much concern to both labour and conservative governments the situation in britain was therefore in sharp contrast to that traditionally envisaged in the literature on fiscal federalism which largely reflects conditions in the united states for it was usually assumed that local government neglects externalities notably in education and should therefore be encouraged to spend more by schemes for rewarding tax effort musgrave i 96 i more recently when brennan and buchanan i980 have discussed the means of reducing total government expenditure they recommended an increase in the scope of local government an astonishing suggestion from a british point of view whatever the reasons for such national differences it should be common ground that the reason for having some taxing power at the local level is to permit some diversity of choice if the choice is to be effectively exercised however an appropriate form of local taxation is clearly required

long memory versus structural breaks in modeling and forecasting realized volatility we explore the possibility of structural breaks in the daily realized volatility of the deutschemark dollar yen dollar and yen deutschemark spot exchange rates with observed long memory behavior we find that structural breaks in the mean can partly explain the persistence of realized volatility we propose a var rv break model that provides superior predictive ability when the timing of future breaks is known with unknown break dates and sizes we find that a var rv i d long memory model provides a robust forecasting method even when the true financial volatility series are generated by structural breaks

tax progression in lindahl equilibrium abstract this paper demonstrates that the incidence of benefit taxation depends on the ratio of income and price elasticities of demand for public goods several previously stated special cases of this formula are derived and some conflicting empirical evidence is discussed

demand for local public spending evidence from the british social attitudes survey the british social attitudes survey bsas is a uk wide survey that provides a rich source of information on individuals attitudes to a variety of topics including locally provided service in this paper we seek to model answers to questions on attitudes to local authority spending which invite the expression of a private demand for local public spending a convincing picture has emerged of locally provided public goods as imperfectly congested public goods with a price elastic and probably income inelastic demand the view that central government grants may induce voter confusion over tax prices of public services also finds support

congestion function specification and the publicness of local public goods abstract this paper is about the measurement of congestion within the median voter demand framework the model of congestion traditionally used in the literature and four others are compared and tested in a median voter framework the results show that a more flexible functional form which imposes fewer a priori restrictions on the data does at least as good a job of explaining variations in local government expenditures furthermore it is shown that measured publicness of local public goods depends entirely on the a priori restrictions imposed on the congestion function

on the measurement of congestion in the provision of local public goods abstract this paper contends that a measurement problem the zoo effect has led to upwardly biased estimates of the degree to which local public goods are subject to congestion the suggestion is that the observed positive correlation between public expenditure and population size reflects in large measure the wider range of services provided in more populous jurisdictions not simply a high propensity of these goods to become congested

portfolio optimization in the presence of dependent financial returns with long memory a copula based approach abstract in this paper we seek to examine the effect of the presence of long memory on the dependence structure between financial returns and on portfolio optimization first we focus on the dependence structure using copulas to select the best copula in addition to the goodness of fit tests we employ a graphical method based on visual comparison of the fitted copula density and the smoothed copula density estimated by wavelets moreover we check the stability of the copula parameter the empirical results show that the long memory affects the dependence structure second we analyze the impact of this dependence structure on the optimal portfolio we propose a new approach based on minimizing the conditional value at risk and assuming that the dependence structure is modeled by the copula parameter the empirical results show that our approach outperforms the traditional minimizing variance approach where the dependence structure is represented by the linear correlation coefficient

equivalence scales and the costs of disability abstract the impact of disability on household welfare is estimated by equivalence scales using data from the 1986 1987 fes disability survey three methods of identifying scales from cross section data are considered these imply a series of restrictions that are tested on quadratic logarithmic engel curves the results indicate that there are substantial consumption costs associated with physical disability

fiscal incidence at the local level this paper represents an attempt to make aaron and mcguire s 1 approach to incidence operational 2 the tax paid by any individual is interpreted by aaron and mcguire as the sum of two components the first is a lindahl tax equal to the individual s marginal rate of substitution between the public good and income times the amount of the public good provided the second component is a negative or positive transfer equal to the lindahl tax minus the tax the individual has actually paid this second component is used to measure the incidence or redistributional impact of a particular budget program empirically aaron and mcguire found that the computation of lindahl taxes is highly sensitive to the choice of individual utility functions under certain assumptions that sensitivity is reflected in the value of a coefficient related to the marginal rate of substitution between the public good and income maital 16 later on used three separate identical estimates of this coefficient to reduce the ambiguity in the computation of lindahl taxes this paper offers an alternative computational approach to aaron and mcguire s the key information on lindahl tax prices or marginal rates of substitution is obtained from individual demand curves for public goods which are estimated using the median voter model see 5 an advantage of this approach over aaron and mcguire s is that it does not assume separability of the public good and income in taxpayers preferences the present approach also permits the study of the incidence of a budget policy on groups defined by socio demographic characteristics other than income on the other hand and because of empirical reasons which will become apparent below the present approach is useful for the study of incidence at the local level only section 1 of the paper restates the measure for the simultaneous incidence of taxes and one public good henceforth called fiscal incidence in the context of a formalized political process this section also discusses some of the theoretical difficulties involved in extending the case with one public good to the multi

welfare consequences of food prices increases evidence from rural mexico this paper presents an analysis of the welfare consequences of recent increases in food prices in mexico using micro level data we estimate a quaids model of demand for food using data collected to evaluate the conditional cash transfer program oportunidades we show how the poor have been affected by the recent increases and changes in relative prices of foods we also show how a conditional cash transfer program provides a means of alleviating the problem of increasing staple prices and simulate the impact of such a policy on household welfare and consumer demand we contrast this policy with alternative policy responses such as price subsidies which distort relative prices and are less well targeted

long memory and level shifts in the volatility of stock market return indices there has been interest in the possibility of confusing long memory and structural changes in level and studies showed that when a short memory process is contaminated by level shifts the estimate of the fractional differencing parameter is biased upward and the autocovariances decay slowly we analyze the properties of the autocorrelation function the periodogram and the log periodogram estimate of the memory parameter when the level shift component is a mixture model our results explain many findings reported and uncover new features we confront our theoretical predictions using log squared returns as a proxy for the volatility of some assets returns including daily s p 500 returns over the period 1928 2002 the estimates follow patterns that would obtain if the process was short memory with level shifts instead of fractionally integrated a simple test is also proposed which reinforces this conclusion

forecasting the realized volatility of the oil futures market a regime switching approach considering nonlinear and highly persistent dynamics of realized volatility we introduce markov regime switching models to the heterogeneous autoregressive model of the realized volatility har rv models to forecast the realized volatility of the crude oil futures market in sample results demonstrate that the high volatility regime is short lived out of sample results suggest that har rv models with regime switching increase the forecasting ability significantly than those without regime switching moreover these findings are robust for different actual volatility benchmarks forecasting windows and model settings

public choice perspectives on the poll tax the community charge which was introduced to england and wales on i april i990 is part of a reform of local government finance with the avowed intention of enhancing local accountability by creating a direct link between local expenditure local taxation and local voting this paper applies public choice theories to evaluate both the economics of its introduction and the responses of the public to the charge in its initial months section ii reviews the main public choice rationale for the community charge and relates accountability to efficient resource allocation section iii examines evidence on voter awareness and fiscal illusion in order to consider whether the replacement of domestic rates by this tax will increase local accountability the stance taken in sections ii and iii is one in which the conservative government is privy to the messages of public choice theory and acts as if to further the public interest by eliciting the correct responses to slay the local government leviathan however any government may have interests other than and divergent with those of the public and this will introduce distortions even in the implementation of public choice prescriptions this point is developed in section iv to offer one explanation of the recent history of the community charge

efficient intra household allocations a general characterization and empirical tests the neoclassical theory of demand applies to individuals yet in empirical work it is usually taken as valid for households with many members this paper explores what the theory of individuals implies for households that have more than one member we make minimal assumptions about how the individual members of the household resolve conflicts all we assume is that however decisions are made outcomes are efficient we refer to this as the collective setting we show that in the collective setting household demands must satisfy a symmetry and rank condition on the slutsky matrix we also present some further results on the effects on demands of variables that do not modify preferences but that do affect how decisions are made we apply our theory to a series of surveys of household expenditures from canada the tests of the usual symmetry conditions are rejected for two person households but not for one person households we also show that income pooling is rejected for two person households we then test for our collective setting conditions on the couples data none of the collective setting restrictions are rejected we conclude that the collective setting is a plausible and tractable next step to take in the analysis of household behavior

rational expectations econometric analysis of changes in regime an investigation of the term structure of interest rates abstract this paper is of interest both for its methodological contribution of new tools for analyzing rational expectations models and for its substantive conclusions concerning the term structure of interest rates during the monetary experiment of october 1979 the paper studies systems subject to changes in regime interpreted here as occasional discrete shifts in the parameters governing the time series behavior of exogenous economic variables the specification is shown to be quite tractable both theoretically and empirically the technique is used to analyze yields on three month treasury bills and ten year treasury bonds during 1962 to 1987 a constant parameter linear model for short term rates is shown to be inconsistent both with the univariate time series properties of short rates and with the observed bivariate relation between long and short rates under the expectations hypothesis of the term structure an alternative nonlinear model that admits the possibility of changes in regime affords a much better description of the univariate process for short rates moreover the cross equation restrictions implied by the expectations hypothesis of the term structure are consistent with the nonlinear specification indeed the residuals of the restricted relation have a standard error of only 0 8 basis points this is a third less than that of a completely unrestricted linear regression of long rates on short rates and compares with an unconditional standard deviation of long rates of 142 basis points i conclude that once the recognition by bond traders of changes in regime is taken into account the expectations hypothesis of the term structure of interest rates holds up fairly well for these data

determinants of south asian entrepreneurial growth in britain a multivariate analysis this paper aims to contribute to our understanding of the factors influencing south asian entrepreneurial growth in britain it develops a multivariate model along the lines of small business economics but includes cultural and social variables the theoretical model specified assumes that cultural factors have an augmenting effect on socio economic factors a distinction is also drawn between initial entrepreneurial characteristics and later expansion strategies used the empirical model based on the general to specific approach can explain almost 60 per cent of entrepreneurial growth the results suggest that moving away from a style of management based on immigrant culture has a positive impact on growth this requires greater delegation of responsibilities to non family employees at the same time strengthening links with the country of origin has a positive impact on growth while the commitment to work hard at start up is essential human capital factors like the entrepreneur s educational attainment and employee training appear to be more crucial than financial resources in contributing to growth

hourly volatility spillovers between international equity markets abstract this paper examines the timing of mean and volatility spillovers between new york and london equity markets using an arch model it is found that the evidence of volatility spillovers between these markets is minimal and have a duration which lasts only an hour or so the most significant effects surround the movement of share prices around the new york opening but these results are not strong several new arch models are estimated including an asymmetric or leverage model and a non linear model which allows big shocks to have a different impact from small shocks

food and cash transfers evidence from colombia we study food engel curves among the poor population targeted by a conditional cash transfer programme in colombia after controlling for the endogeneity of total consumption and for the price variability across villages our estimates imply that an increase in consumption by 10 would lead to a decrease of 1 in the share of food however quasi experimental estimates of the impact of the programme show that the share of food increases this result is not inconsistent with the hypothesis that the programme could increase the bargaining power of women inducing a more than proportional increase in food consumption

futures hedging with markov switching vector error correction fiegarch and fiaparch abstract markov switching vector error correction asymmetric long memory volatility models with fat tailed innovations are proposed bivariate two state versions of the models are applied to a futures hedge of the s p500 regime switches occur between high and low cost of carry states via changes in the error correction term or basis regime identification is therefore dominated by switches in the mean not volatility relative to a number of alternatives the proposed models provide superior out of sample forecasts of the covariance matrix particularly for horizons greater than 10 days ahead when hedging markov switching with long memory improves the tail risk of hedged returns beyond 10 day horizons however there is mixed support for models with volatility asymmetries these findings have important implications for the development of multivariate models and other applications including portfolio management spread option pricing and arbitrage

planned behaviour of tourism students entrepreneurial intentions in china this research aims to investigate the influence of planned behaviour and personal variables on entrepreneurial intention in order to explain and improve low entrepreneurial intention among tourism

long memory and regime switching a simulation study on the markov regime switching arfima model abstract recent research argues that if the cause of confusion between long memory and regime switching were properly controlled for they could be effectively distinguished motivated by this idea our study aims to distinguish between them of financial series we firstly model long memory and regime switching via the autoregressive fractionally integrated moving average arfima and markov regime switching mrs models respectively their finite sample properties and the confusion are investigated via simulations to control for the cause of this confusion we propose the mrs arfima model a monte carlo study shows that this framework can effectively distinguish between the pure arfima and pure mrs processes furthermore mrs arfima outperforms the ordinary arfima model for data simulated from the mrs arfima process finally empirical studies of hourly and five minute garman klass and realized volatility of the ftse index is conducted to demonstrate the advantages and usefulness of the proposed mrs arfima framework compared with the arfima and mrs models in practice

tiebout bias and the demand for local public schooling institute of university of ii business and california economic research berkeley center for real estate and urban economics working paper series working paper 86 109 tiebout bias and the demand for local public schooling by daniel l rubinfeld perry shipiro judith roberts these papers are preliminary in nature th urpose 39 to stimulate 39 ussion comment therefore they are not t cited or quoted 39 ny p ation wit express permissio the author graduate school of business administration

the impact of congestion on local public good production abstract this paper models local public goods production where allocation of the publicly provided input occurs simultaneously with production of the final service output the framework models local public goods as developed in club theory where congestion is an increasing function of population central to identification of the model is that the quantities of the input police are differentiated from the produced output safety estimation is across neighborhoods within a single city the results show there is a very low elasticity of congestion on average but safety in some neighborhoods in more congested than private goods

an exploration of entrepreneurial activity among asian small businesses in britain this paper investigates various aspects of asian entrepreneurship based on a survey of small indian pakistani and bangladeshi businesses in britain it analyses the motives for business entry the choice of initial business the factors that influence business success and the validity of treating asian businesses as a homogeneous group it cannot support the hypothesis that asians were pushed into self employment in order to avoid unemployment the nature of entrepreneurial entry predominantly through small retail businesses depends largely on the access to informal rather than formal sources of capital and information or advice as well as on the entrant s previous experience business success appears to be closely related both to the share of personal capital invested at start up and to the entrepreneur s educational qualifications the evidence suggests that the motives for business entry differ among the three asian communities studied although that does not seem to have a lasting effect on their business success the predisposition of many well educated asian migrants towards establishing businesses with their own capital in an unfamiliar environment illustrates their entrepreneurial spirit the paper points to the potential role of banks and government agencies in encouraging the creation of many more such small businesses in britain

exploiting the heteroskedasticity in measurement error to improve volatility predictions in oil and biofuel feedstock markets abstract we examine whether heteroskedasticity in measurement errors improves the volatility forecasting ability of the heterogenous autoregressive har model in crude oil and biofuel feedstock markets we also examine the incremental explanatory power of jumps and the investor fear gauge ifg over heteroskedasticity in measurement errors in improving the volatility forecasting ability of the har model in each of these markets for the in sample evaluation we find that exploiting the heteroskedasticity of measurement errors in the har model improves the model s goodness of fit measured by adjusted r2 by up to 10 depending on the market ifg has a significant incremental role over heteroskedasticity in measurement errors in improving the fit of the har model in both the crude oil and biofuel feedstock markets while jumps have a significant incremental role in improving the fit of the har model in the crude oil market but not the biofuel feedstock markets for the out of sample forecasts including regime switching improves volatility predictions in the corn and wheat markets across all forecasting horizons while for the soybean market including regime switching improves the performance of multi step volatility forecasts in the out of sample forecasts the best ranked models almost always include heteroskedasticity of measurement error and ifg

are business startups debt rationed using a large random sample of u k start ups and a rich data set the paper demonstrates that human capital is the true determinant of survival and that the correlation between financial capital and survival is spurious provision of finance is demand driven with banks supplying funds elastically and business requests governing take up firms self select for funds on the basis of the human capital endowments of the proprietors with better businesses more likely to borrow a reason why others have seemingly identified start up debt gaps may be the failure to test a sufficiently rich empirical model copyright 1996 by royal economic society

do more heavily regulated economies have poorer performing new ventures evidence from britain and spain we test two alternative perspectives on the start up size and subsequent growth of new firms in a heavily regulated hr economy and a lightly regulated lr economy the first argues that in an hr economy there will be fewer new firms and those that do start will be larger than those in an lr economy but they will grow more slowly a second perspective is that regulation does not influence the scale of entrepreneurship merely its distribution between that which is registered and that which is not registered using parallel datasets for hr spain and lr britain we find some support for both perspectives specifically we find that registered new firms in britain do start smaller than in spain and do grow faster however when both registered and unregistered firms are included these differences disappear

long memory in volatility and trading volume abstract we use fractionally integrated time series models to investigate the joint dynamics of equity trading volume and volatility bollerslev and jubinski 1999 show that volume and volatility have a similar degree of fractional integration and they argue that this evidence supports a long run view of the mixture of distributions hypothesis we examine this issue using more precise volatility estimates obtained using high frequency returns i e realized volatilities our results indicate that volume and volatility both display long memory but we can reject the hypothesis that the two series share a common order of fractional integration for a fifth of the firms in our sample moreover we find a strong correlation between the innovations to volume and volatility which suggests that trading volume can be used to obtain more precise estimates of daily volatility for cases in which high frequency returns are unavailable