piecewise linear tax functions progressivity and the principle of equal sacrifice abstract in this paper we discuss and criticise the conclusion asserted by mitra and ok mitra t ok e 1996 personal income taxation and the principle of equal sacrifice revisited international economic review 37 925 948 that when we restrict our attention to piecewise linear tax functions the principle of equal sacrifice implies progressivity

rational household labor supply traditionally household behavior is derived from the maximization of a unique utility function in this paper we propose an alternative approach in which the household is modeled as a two member collectivity taking pareto efficient decisions the consequences of this assumption are analyzed in a three good model in which only total consumption and each member s labor supply are observable if the agents are assumed egoistic i e they are only concerned with their own leisure and consumption it is possible to derive falsifiable conditions upon household labor supplies from both a parametric and nonparametric viewpoint if alternatively agents are altruistic restrictions obtain in the nonparametric context useful interpretation stems from the comparison with the characterization of aggregate demand for a private good economy

marriage market divorce legislation and household labor supply this paper provides a theoretical framework for analyzing the impact of the marriage market and divorce legislation on household labor supply in our approach the sex ratio in the marriage market and the rules governing divorce are examples of distribution factors these factors are defined as variables that affect the household members bargaining position but not preferences or the joint budget set we extend the collective labor supply model developed by chiappori to allow for distribution factors we show that our model imposes new restrictions on the labor supply functions and eases the identification of individual preferences and the intrahousehold decision process the model is estimated using psid data for the year 1988 our results do not reject the restrictions imposed by the model also the sex ratio and divorce laws deemed favorable to women are found to affect labor supply behavior and the decision process in the directions predicted by the theory and to have sizable effects

collective labor supply and household production this paper emphasises the importance of incorporating household production into the collective model of the household and considers how and to what extent the results of chiappori 1992 can be extended to this case this abstract was borrowed from another version of this item

intra household allocation of time and money across siblings abstract how work and consumption are allocated within the family has important consequences for the welfare of individual household members using data on time use and assignable goods for individual siblings across india peru ethiopia and vietnam aged 5 17 i show that there is substantial within sibling variation in leisure as well as consumption allocations i then test whether there is evidence for favoritism in the joint allocation of leisure and consumption toward a particular gender i find that boys with a younger sister have substantially more relative leisure compared to girls with a younger sister in all four countries consumption allocations are relatively higher for older siblings of mixed gender sibling pairs irrespective of the sex of the child i reject that favoritism in consumption equals favoritism in leisure in three of the four countries finally i show suggestive evidence on the role of reward and preferences for allocations of time and money in the household

introducing household production in collective models of labor supply in a recent paper chiappori 1992 i proposed a model of labor supply based on a collective representation of household behavior in this framework each household member is characterized by his or her own utility function and decisions are only assumed to result in pareto efficient outcomes i showed that these simple assumptions were sufficient to i generate testable restrictions on labor supply functions and ii recover individual preferences and the outcome of the decision process from observed behavior for the sake of simplicity the results were derived in the simplest possible case namely a static labor supply model with private consumptions such a framework was appropriate only for the purpose of the paper that is a preliminary exploration of the properties of collective models of labor supply the next step is to evaluate the robustness of the results to various extensions of the basic model this opens a general research program and generates a wide range of particular problems that it is hoped will be considered in the future among the most serious shortcomings of the 1992 model is the absence of household production as in most labor supply models agents were assumed to divide their time between market activities and leisure as apps and rees 1997 in this issue very rightly point out in their comment the absence of domestic production is far from innocuous as soon as welfare issues are considered for instance a low level of market labor supply will automatically be interpreted as a large consumption of leisure whereas it may in fact reflect the specialization of one of the members in domestic

on the principle of equal sacrifice in income taxation abstract in an influential article by young journal of economic theory 1988 44 321 335 it is shown that the traditional equal sacrifice principles in taxation can be justified from a non utilitarian perspective by proving that equal sacrifice is in fact a consequence of more primitive concepts of distributive justice this result is obtained in a distribution theoretic setting where total revenue to be raised is fixed the present paper studies the same question in a setting where the basic problem is to determine a tax function without any reference to the total tax revenue a setting which is familiar from the theory of progressive taxation and shows that i there exists a utility function which is continuous and strictly increasing relative to which all agents sacrifice equally if and only if the tax function is incentive preserving and ii any convex hence progressive and incentive preserving tax function equalizes sacrifice relative to a utility function which is continuous strictly increasing and concave

on the equitability of progressive taxation abstract we propose the principle of equal sacrifice to determine the class of vertically inequitable progressive taxes a necessary condition for an income tax function to be equal sacrifice is formulated and hence a subclass of progressive taxes which cannot inflict the same sacrifice upon all individuals relative toanystrictly increasing and concave utility function is determined conversely it is shown in a general framework that any convex thus progressive tax function satisfies the principle of equal sacrifice our findings point to the fact that equal sacrifice under progressive income taxation depends heavily upon the degree of marginal rate as opposed to average rate progressivity journal of economic literatureclassification numbers d63 h20

collective labour supply taxes and intrahousehold allocation an empirical approach most empirical studies of the impact of labor income taxation on the labor supply behavior of households use a unitary modeling approach in this article we empirically analyze income taxation and

the impossibility of a progressive tax structure abstract when households are identical in all respects other than income a non decreasing average tax rate is both necessary and sufficient for post tax incomes to be always at least as equal as pre tax incomes this paper investigates whether this well known result can be extended to households with different needs a tax structure which never increases inequality in the lorenz sense is shown to be unable to discriminate between household types if in addition the tax structure never reduces the relative income of the poorest member of the neediest group of households then the same proportional tax must be applied to all households and redistribution is impossible either within or between groups of households with differing needs a similar conclusion is reached using conventional equivalence scale arguments and also applies when the parameters of the tax schedules are determined endogenously we discuss the significance of this impossibility result and its implications for tax design

progressive taxation and the equal sacrifice principle abstract a classical problem in public finance is when does equal sacrifice imply progressive taxation suppose that a tax schedule imposes equal sacrifice on all taxpayers in loss of utility and that this property is preserved under re indexing of the schedule then the utility function must exhibit constant relative risk aversion i e it must be logarithmic or a power function if equal sacrifice relative to such a utility function holds for all taxable incomes and if tax rates do not exceed 100 percent then the degree of relative risk aversion must be at least unity and the tax must be nonregressive

education choices and returns to schooling mothers and youths subjective expectations and their role by gender abstract in this paper we investigate the role of expected returns to schooling and of perceived risks of unemployment and earnings as determinants of schooling decisions moreover our data also allow us to analyze whether youths and or mothers expectations predict schooling decisions and whether this depends on the age and gender of the youth in particular we use mexican data that contain labor market expectations of mothers and youths we find that expected returns and risk perceptions are important determinants of schooling decisions the latter in particular from the perspective of the mother boys expectations predict the decision to enter college but not to enter high school while girls own expectations do not predict either of the two educational decisions mothers expectations are particularly strong predictors of their daughters decisions

capital market imperfections and the consumption function a model is presented in which there is asymmetric information between borrowers and lenders two questions are asked i would liquidity constraints in such a model take the form of credit rationing or of a wedge between borrowing and lending rates and ii how do these constraints affect the aggregate consumption function some empirical

why did japan s household savings rate fall in the 1990s this study investigates empirically why japan s household savings rate fell in the 1990s we constructed an economic model consisting of two types of household unconstrained life cycle households and liquidity constrained households unconstrained households generally save but liquidity constrained households consume all of their disposable income we found that the proportion of liquidity constrained households increased sharply in the late 1990s which led to a decline in japan s household savings rate our simulation analysis demonstrates that if the proportion of liquidity constrained households in the 1990s had stayed at the level as that of the late 1980s the household savings rate would have increased by four points in 2001 and 2002

the equal absolute sacrifice principle revisited abstract we summarize the literature on equal absolute sacrifice income taxes and make some extensions we adapt the utilitarian equal sacrifice criterion to a wide class of rank dependent social welfare functions and find that liabilities depend on both income and position in the distribution we investigate whether such taxes need be progressive using a combination of analytics and simulation and in the process uncover tax functions not previously recognized as equating sacrifices finally out of horizontal equity considerations a new concept of the equal treatment of equals by an income tax emerges with implications for future work whose significance is discussed

identification of random resource shares in collective households without preference similarity restrictions abstractresource shares defined as the fraction of total household spending going to each person in a household are important for assessing individual material well being inequality and poverty

education choices in mexico using a structural model and a randomized experiment to evaluate progresa in this paper we evaluate the effect of a large welfare program in rural mexico for such a purpose we use an evaluation sample that includes a number of villages where the program was not implemented for evaluation purposes we estimate a structural model of education choices and argue that without such a framework it is impossible to evaluate the effect of the program and especially possible changes to its structure we also argue that the randomized component of the data allows us to identify a more flexible model that is better suited to evaluate the program we find that the program has a positive effect on the enrollment of children especially after primary school we also find that an approximately revenue neutral change in the program that would increase the grant for secondary school children while eliminating for the primary school children would have a substantially larger effect on enrollment of the latter while having minor effects on the former

inequality reducing and inequality preserving transformations of incomes symmetric and individualistic transformations abstract this paper analyzes the redistributive effect of transformations of incomes when the same transformation is applied to all incomes following marshall and olkin lnequalities a theory of majorization and its applications academic press new york 1979 we consider two competing families of nested inequality criteria all of which are consistent with the lorenz ordering looking at the transformations that reduce the inequality of incomes we show that within each family all the criteria generate exactly the same class of transformations we next identify those transformations that preserve or convert a given inequality ranking into a finer ranking we finally find necessary and sufficient conditions to be imposed on a pair of transformations for the inequality ranking of distributions to be preserved journal of economic literature classification number d31 d63 h24

lorenz dominating income tax functions this paper examines the rest rictions imposed upon income tax functions by the criterion of lorenz domination under alternative tax revenue raising regimes both neces sary and sufficient conditions are derived the necessary conditions are weaker than those already existing in the literature while the a nalysis uncovers the multitude of sufficient conditions that are poss ible copyright 1988 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

do husbands and wives pool their resources evidence from the united kingdom child benefit common preference models of family behavior imply income pooling a restriction on family demand functions such that only the sum of husband s income and wife s income affects the allocation of goods and time testing the pooling hypothesis is difficult because most family income sources are not exogenous to the allocations being analyzed in this paper we present an alternative test based on a natural experiment a policy change in the united kingdom that transferred a substantial child allowance to wives in the late 1970s using family expenditure survey data we find strong evidence that a shift toward greater expenditures on women s clothing and children s clothing relative to men s clothing coincided with this income redistribution

an empirical model of collective household labour supply with non participation i present a structural empirical model of collective household labour supply that includes the non participation decision i specify a simultaneous model for hours participation and wages of husband and wife i discuss the problems of identification and statistical coherency that arise in the application of the collective household labour supply model the model includes random effects and it is estimated using a panel data set of dutch couples the estimates allow me to check the underlying regularity conditions on individual preferences and to obtain estimates of the sharing rule that governs the division of household income between husband and wife

financial liberalization and aggregate consumption the evidence from taiwan this paper considers the effect of financial liberalization on aggregate consumption with a special focus on taiwan which has sustained a high savings rate and a rapid rate of economic growth under financial dualism but has undertaken financial liberalization since the 1980s leading to an expansion of the formal financial sector the paper finds that because of an active informal financial sector consumers in taiwan are less credit constrained than in other developing countries however the expansion of the formal financial sector has contributed to some relaxation of consumer credit constraints and thereby changes in the income and interest elasticities of consumption it also has brought about a higher consumption growth rate offsetting at least partially the positive growth effect of financial liberalization which helps improve the efficiency in finanacial intermediation

the role of preferences and opportunity costs in determining the time allocated to housework the time devoted to housework in couple households is substantial research on intrahousehold time allocations has generally assumed that housework is a necessary evil and that the partner with the lower opportunity cost of time in the market will devote more time to home production in reality households individuals are likely motivated to maximize happiness and preferences regarding even mundane household chores differ considerably we use information on preferences opportunity costs and time use from the 2000 2001 united kingdom time use survey to examine the time partners spend doing laundry ironing cleaning and food shopping while compared with other household chores such as gardening and do it yourself repairs the selected activities are generally less enjoyable preferences do vary across the population and are correlated with reported time use joint multivariate analysis of his and her time on weekend and weekday days as well as maid service reveals that her opportunity cost of time matters substantially more than his but that his preferences play a greater role than hers

exploring consumption based asset pricing model with stochastic trend forcing processes using canadian data the consumption based asset pricing model is studied defined in terms of nondurable and durable goods consumption a two stage estimation procedure is used which takes account of the presence of common stochastic trends in the forcing processes this method yields more reasonable estimates of the preference parameters than the previous studies did and the asset pricing equation is not rejected by the data moreover the preference specification adopted in this paper allows a number of useful economic information to be obtained the additive separability assumption and the cobb douglas functional form of the utility function are ruled complements in the sense of edgeworth and pareto

the value of tax progressivity evidence from survey experiments abstract the aim of this paper is to investigate how people value tax progressivity more precisely i study the potential trade off between any improvement in the final income distribution and the progressivity of the tax schedule to do this i designed survey experiments in which respondents were asked to rank or to choose between different taxation redistribution schemes with different treatments varying in terms of information availability 1 when only information about final incomes is provided and 2 when information about average tax rates is also available using a within subject design the instability of rankings between 1 and 2 indicates whether or not respondents value tax progressivity i find that information about tax rates significantly affects respondents judgments about tax schemes they exhibit a strong preference for tax progressivity i e they accept a fall in the quality of the final income distribution in exchange for progressive taxation the results of an additional treatment suggest that the mere fact of providing new information cannot account for this finding

inequality reducing properties of composite taxation abstract on the one hand we know that the more progressive a tax schedule the more equally distributed the after tax incomes u jakobsson j public econ 5 1976 161 168 on the other hand most tax systems involve a complex procedure where individual incomes are successively subjected to different rounds of taxation we study in the paper the inequality reducing properties of the composition of different taxation schemes and we identify necessary and sufficient conditions for after tax inequality to decrease when the degree of progressivity of one element or more of the tax system is increased for the sake of generality we assimilate the set of income distributions with the space of probability measures over an interval of the real line and any function that associates after tax incomes to before tax incomes is viewed as a taxation scheme this general approach proves to be particularly powerful when investigating the restrictions the egalitarian principle imposes on the set of admissible taxation schemes journal of economic literature classification numbers d31 d63 h24

cross country heterogeneity in intertemporal substitution abstract we collect 2735 estimates of the elasticity of intertemporal substitution in consumption from 169 published studies that cover 104 countries during different time periods the estimates vary substantially from country to country even after controlling for 30 aspects of study design our results suggest that income and asset market participation are the most effective factors in explaining the heterogeneity households in rich countries and countries with high stock market participation substitute a larger fraction of consumption intertemporally in response to changes in expected asset returns micro level studies that focus on sub samples of rich households or asset holders also find systematically larger values of the elasticity

equal sacrifice and incentive compatible income taxation abstract the concepts of equal sacrifice and incentive compatibility in income taxation have been of interest to economists for some time here we attempt to integrate the two literatures in a model that offers a labor leisure choice to consumers while imposing an equal relative or absolute sacrifice tax system the main result is that equal sacrifice incentive compatible income tax systems generally exist and are locally unique examples are presented where this tax system is easy to compute comparative statics are calculated finally some remarks about the welfare properties of these tax systems are made

personal income taxation and the principle of equal sacrifice revisited this paper shows that in the domain of piecewise linear statutory income tax functions the principle of equal sacrifice implies tax progressivity the progressivity implication of the doctrine is in fact stronger the equal sacrifice principle in essence characterizes marginal rate progressivity a result which is in sharp contrast with the standard literature on public finance the authors also apply their findings to the personal statutory income taxation practices of the oecd countries and observe that the united states and turkey were the only ones violating the principle of equal sacrifice in the time period 1988 to 1991 copyright 1996 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

static and intertemporal household decisions we discuss the most popular static and dynamic models of household behavior our main objective is to explain which aspects of household decisions different models can account for using this insight we describe testable implications identification results and estimation findings obtained in the literature particular attention is given to the ability of different models to answer various types of policy questions

distributive justice in taxation abstract a classical criterion for apportioning taxes is that all should sacrifice equally in loss of utility suppose that a method of apportioning taxes is continuous and has the following four properties i the way that taxpayers split a given tax total depends only on their own taxable incomes ii an increase in the tax total implies that everyone pays more iii every incremental increase in tax is apportioned according to taxpayers current after tax incomes iv the ordering of taxpayers by pre tax income and after tax income is the same then there exists a utility function relative to which all sacrifice equally

changing the rules midway the impact of granting alimony rights on existing and newly formed partnerships this article analyses the effect of a reform granting alimony rights to cohabiting couples in canada a collective household model with a matching framework predicts that changes in alimony laws would affect existing couples and couples to be differently for existing couples it benefits the intended beneficiary but for couples not yet formed it generates offsetting intra household transfers and lower intra marital allocations for the beneficiary our empirical analyses confirm these predictions among couples united before the reform obtaining the right to petition for alimony led women to lower their labour force participation but not among newly formed cohabiting couples

spending time and money within the household we consider both theoretically and empirically the allocation of time and money within the household the research question is whether a married person who enjoys more leisure than their partner also receives more consumption which seems to indicate the outcome of power within the household or receives less consumption which seems to indicate differing intrahousehold preferences we develop a simple parametric structural model with household production that is tested on survey data we find that relative wages have an impact on power for leisure this effect is dominated by a conventional wage effect in which the partner who has the higher wage takes less leisure

children s resources in collective households identification estimation and an application to child poverty in malawi children s resources matter but they are hard to identify because consumption is typically mea sured at the household level modern collective household models permit some identication of indi vidual household member resources but these models typically either ignore children or treat them as attributes of adults we propose a collective household model in which children are people with their own utility functions possibly assigned to them by parents extending the frameworks of browning chiappori and lewbel 2007 and lewbel and pendakur 2008 we show identication of children s resource shares within households we invoke semiparametric restrictions on individual preferences and use data on the household level consumption of assignable private goods to achieve identication of each individual s resource share within the household we show this without being able to observe consumption by individual household members of goods that are partly or wholly shared goods within the household further we obtain identication using only engel curves and so do not require ob served price variation in the data we estimate our model using data from malawi andnd that as the number of children in a household grows women s resource shares fall and children s resource shares rise and men s resource shares are basically unchanged we alsond evidence of gender bias against girls and observe that the resource shares of mothers and children are increasing in the education level of the mother finally we use our estimates to construct poverty indices at the person level andnd that per capita poverty indices understate the incidence of child poverty in malawi

sharing rule identification for general collective consumption models we propose a method to identify bounds i e set identi cation on the shar ing rule for a general collective household consumption model unlike the eects of distribution factors it is well known that the level of the sharing rule cannot be uniquely identi ed without strong assumptions on preferences across households of dierent compositions our new results show that though not point identi ed without these assumptions narrow bounds on the sharing rule can be obtained we get these bounds by applying revealed preference restrictions implied by the collective model to the household s continuous aggregate demand functions we obtain informative bounds even if nothing is known about whether each good is public private or assignable within the household though having such infor mation tightens the bounds we apply our method to us 1999 2009 psid data this application obtains tight sharing rule bounds that yield useful conclusions regarding the eects of income and wages on intrahousehold resource sharing and on the prevalence of individual as opposed to household level poverty

perceptional inequality and preferential judgements an empirical examination of distributional axioms there are two categories of income distribution evaluations first the more or less value free perception of income inequality as a statistical dispersion and second the valuation of income distributions according to an explicit social welfare function which is meant to capture all of society s value judgements these societal value judgements can be expressed in the form of preferences whereas the inequality perception of income distributions appeals to an observer s sober judgement the revelation of preferences with respect to specific income distributions appeals to his or her sentiments

collective labor supply and welfare the paper develops a general collective model of household labor supply in which agents are characterized by their own possibly altruistic preferences and household decisions are only assumed to be pareto efficient an alternative interpretation is that there are two stages in the internal decision process agents first share nonlabor income according to some given sharing rule then each one optimally chooses his or her own labor supply and consumption this setting is shown to generate testable restrictions on labor supplies moreover the observation of labor supply behavior is sufficient for recovering individual preferences and the sharing rule up to a constant finally the traditional tools of welfare analysis can be adapted to the new setting

married with children a collective labor supply model with detailed time use and intrahousehold expenditure information we propose a collective labor supply model with household production that generalizes an original model of blundell chiappori and meghir 2005 in our model adults individual preferences not only depend on own leisure and individual private consumption of market goods they also depend on the consumption of domestic goods which are produced by combining goods bought on the market with individuals time we apply our model to new and unique data on dutch couples with children the data contains detailed information about the spouses time use and the intrahousehold allocation of all expenditures our application uses a novel estimation strategy that builds upon the familiar two stage allocation representation of the collective model we obtain interesting and plausible empirical results spouses preferences depend on the consumption of domestically produced goods including children s welfare in addition pareto weights depend on variables like the individual wages and the share in the household s nonlabor income finally and perhaps surprisingly we do not nd evidence that mothers care more for their children than fathers this paper draws on data of the liss panel of centerdata special thanks go to marika de bruijne and arthur van soest who helped to construct the questionnaire and to guillaume schollier

nontaxable income and necessary consumption the rousseau s paradox of fiscal egalitarianism this article compares a tax method featuring flat rates and fixed allowances equal for all taxpayers surplus income tax method sitm procedure with a tax method featuring also flat rates and increasing personal allowances ipas to meet the amounts of necessary consumption required by the different living standards discretionary income tax method ditm procedure our results show that the ditm procedure generates an after tax income distribution less unequal and superior in terms of social welfare moreover the assumption for comparison purposes of identical total tax revenues leads to the corollary that the flat tax rate under the ditm is necessarily larger than the one under the sitm being thus the former taxmethod is more progressive than the latter these results imply an obvious paradox considering the commonly accepted principle that basic necessities are the same for everyone rousseau 1755 based on the results obtained in this article we have labelled this paradox as the rousseau s

the identification of unobservable independent and spousal leisure this paper is based on the idea that for each partner in a marriage there are two distinct types of leisure one type is each person s independent or private leisure and the other type is spousal leisure whose importance has long been emphasized in the literature of psychology while each type of leisure is unobservable only total leisure is observed it is shown that the recent collective models of the intrahousehold allocation initiated by chiappori can be extended to identify each type of leisure up to an additive constant in particular the effects of each member s wage household unearned income and extrahousehold environmental parameters on the independent and spousal leisure and on the sharing rule are fully identified the observational requirement here is the same as in other studies namely the observation of individual labor supply individual wages household unearned income one assignable good and consumption expenditure at the household level

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

the intertemporal elasticity of substitution in consumption in the united states and the united kingdom as robert e hall 1988 notes the magnitude of the intertemporal elasticity of substitution in consumption is one of the central questions of macroeconomics do higher expected real interest rates lead to deferred consumption the authors extend hall s methodology and model and compare results for the united sta tes and the united kingdom in both cases they directly estimate the mo ving average process that temporal aggregation might induce in the random disturbances and take account of consumers who do not follow the lif e cycle permanent income model of consumption copyright 1992 by mit press

economic well being and poverty among the elderly an analysis based on a collective consumption model we apply the collective consumption model of browning chiappori and lewbel 2006 to analyse economic well being and poverty among the elderly the model focuses on individual preferences a consumption technology that captures the economies of scale of living in a couple and a sharing rule that governs the intra household allocation of resources the model is applied to a time series of dutch consumption expenditure surveys our empirical results indicate substantial economies of scale and a wife s share that is increasing in total expenditures we further calculated poverty rates by means of the collective consumption model collective poverty rates of widows and widowers turn out to be slightly lower than traditional ones based on a standard equivalence scale poverty among women men in elderly couples however seems to be heavily underestimated overestimated by the traditional approach finally we analysed the impact of becoming a widow er based on cross sectional evidence we nd that the drop increase in material well being following the husband s death is substantial for women in high low expenditure couples for men the picture is reversed

uniform progressivity residual progression and single crossing abstract the relationship between lower residual progression and single crossing conditions as necessary and sufficient conditions for one tax system to be conditionally more progressive or uniformly more progressive than another are clarified

the promise of positive optimal taxation normative diversity and a role for equal sacrifice abstract a prominent assumption in modern optimal tax research is that the objective of taxation is utilitarian i present new survey evidence that most people reject this assumption s implications for several prominent features of tax policy instead preferring tax policies based at least in part on a classic alternative objective the principle of equal sacrifice i generalize the standard model to accommodate this preference for a mixed objective proposing a method by which to make disparate criteria commensurable while respecting pareto efficiency then i show that optimal policy in this generalized model calibrated to the survey evidence and u s microdata is capable of quantitatively matching several features of existing tax policy that are incompatible in the conventional model but widely endorsed in the survey and reality including the coexistence of substantial redistribution and limited tagging together these findings demonstrate the potential of a positive theory of optimal taxation

a test of the unitary and collective models of household labour supply this paper tests the unitary and the collective household labour supply models within a structural framework a nonlinear unrestricted household labour supply system is postulated and the set of parametric restrictions imposed by each model is derived our results generally reject the income pooling restrictions embodied in the unitary model also the symmetry of cross wage effects is rejected however the collective model is not rejected for groups with no pre school children

surprises in the consumption function the life cycle hypothesis has been the dominant theoretical basis for empirical work on the aggregate consumption function for about a quarter of a century under it real consumption is proportional to real life cycle wealth where the factor of proportionality depends on real interest rate expectations and the demographic structure of the population life cycle wealth is the sum of financial and human wealth however because the latter is the present real value of the stream of labour and transfer income expected over the life cycle it is not directly observable this fact has led to a great variety of proxying devices in empirical applications and in consequence much looseness in the interpretation of very different models as being all consistent with life cycle theory indeed one can argue that this has protected the hypothesis from being seriously tested and perhaps rejected an insight associated with friedman 1957 is that the view taken by consumers of life cycle income does not alter by much from period to period since there is greater persistence in life cycle income than in current income this also explains the greater persistence of consumption than of current income intuitively this would suggest that lagged consumption being related to last period s perception of life cycle income which in turn is not much different from this period s perception should have a major role in predicting current consumption this intuition was formalised by hall 1978 using ideas familiar from the study of stock market prices and the term structure of interest rates hall showed that if the real rate of interest is constant and given a number of other assumptions including no transitory element in consumption then the life cycle hypothesis implies that

intra household resource allocation an inferential approach if household income is pooled and then allocated to maximize welfare then income under the control of mothers and fathers should have the same impact on demand with survey data on family health and nutrition in brazil the equality of parental income effects is rejected unearned income in the hands of a mother has a bigger effect on her family s health than income under the control of a father for child survival probabilities the effect is almost twenty times bigger the common preference or neoclassical model of the household is rejected if unearned income is measured with error and income is pooled then the ratio of maternal to paternal income effects should be the same equality of the ratios cannot be rejected there is also evidence for gender preference mothers prefer to devote resources to improving the nutritional status of their daughters fathers to sons

redistributive effects of minimal equal sacrifice taxation we examine the circumstances under which minimal equal sacrifice taxation reduces income inequality focusing on absolute sacrifice and relative inequality we show that after tax incomes are more equally distributed than before tax incomes and that after tax inequality decreases with the revenue to be raised if and only if the elasticity of the marginal utility of income is decreasing however other things equal after tax inequality is shown to decline as the utility function becomes more concave we investigate next how these conclusions extend when one takes the absolute inequality view and considers that it is the relative loss in utility that has to be equalized across individuals

testing the neoclassical model of family labor supply and fertility the mcelroy horney nash bargaining model of family demand behavior relaxes the restriction that nonearned income of husband and wife has the identical effect on family labor supply and commodity demands this restriction of the neoclassical model offamily behavior is tested for the determination of husband and wife labor supply andfertility based on the 1981 socioeconomic survey of thailand the neoclassical restriction is rejected for female labor supply andfertility another unexplored limitation offamily demand studies due to the sample self selection of intact marriages is empirically treated through alternative estimation strategies in this case a more sharply focused theory of marital behavior is needed to identify family demand models

the empirical content of nash bargained household behavior in households whose allocation decisions can be represented as nash bargained household decisions extrahousehold environmental parameters eeps serve as pure shifters of the threat points the comparative statics of changes in demands due to changes in these eeps are given these are incorporated into a comprehensive statement of the empirical content of nash bargained household behavior including a nash generalization of barten s 1966 fundamental matrix equation of the theory of consumer demand estimation and data requirements are discussed along with nested testing of the following structure the neoclassical model is nested in the nash bargained model which in turn is nested in an unrestricted model of household demands emphasized throughout is the enriched menu of explanatory variables for demand analysis provided by the nash model as well as the model s ability to jointly analyze i household formation and ii intrahousehold allocation decisions

testing the permanent income hypothesis the evidence from canadian data this paper investigates whether there are variants of the permanent income model that are consistent with seasonally unadjusted quarterly postwar canadian data the analysis is based on a misspecification test equation which nests the standard permanent income model the results obtained are somewhat unfavourable to the permanent income hypothesis the same results also apply to more general models in which the real interest rate is time varying and the utility function is non separable in consumption and the stock of durable goods un test de l hypothese du revenu permanent resultats derives a partir des donnees cana diennes ce memoire presente les resultats d une enquete pour etablir s il existe un ou des variantes du modele du revenu permanent qui soient compatibles avec les donnees trimestrielles canadiennes non desaisonnalisees pour la periode de l apres seconde guerre mondiale l analyse est fondee sur une equation qui encastre le modele de revenu perma nent standard mais qui est enrichie pour tester la specification de l 6equation les resultats obtenus sont quelque peu defavorables a l hypothese du revenu permanent les memes resultats s appliquent aussi a des modeles plus generaux dans lesquels le taux d interet reel

collective labour supply with children we extend the collective model of household behavior to allow for the existence of public consumption we show how this model allows the analysis of welfare consequences of policies aimed at changing the distribution of power within the household our setting provides a conceptual framework for addressing issues linked to the targeting of specific benefits or taxes we also show that the observation of the labor supplies and the household demand for the public good allow one to identify individual welfare and the decision process this requires either a separability assumption or the presence of a distribution factor

consumption and credit constraints international evidence abstract if some consumers are liquidity constrained aggregate consumption should be excessively sensitive to credit conditions as well as to income moreover the excess sensitivity may vary over time using data for the united states canada the united kingdom japan and france we find a substantial impact of credit aggregates on consumption in all countries considered moreover the borrowing lending wedge is a significant determinant of consumption in the united states canada and japan using extended kalman filtering techniques we show that the excess sensitivity varies over time with a clear tendency to decline in the united states

what s mine is yours the influence of male and female incomes on patterns of household expenditure this paper uses microdata from the 1992 statistics canada family expenditure survey to provide evidence that male and female incomes do not always exert identical influences on household expenditures the novelty of the paper lies in its demonstration that while incomes may be pooled for some categories of consumption e g housing the income pooling hypothesis must be rejected for others we also go beyond simply rejecting the pooling hypothesis to ask how male versus female income is used our results stress the on going importance of traditional gender roles for example we find that expenditures on child care increase only with women s incomes higher male income is not associated with higher expenditure on child care even when both spouses are full time full year paid workers

o princ opio do sacrif ocio equitativo no sistema tributario brasileiro this article investigates by means of the model developed for young 1990 if the direct indirect and total tributes in brazil respect the principle of the equal sacrifice in all the scenes originated in the present analysis as much the observed indirect tributes how much the total tributes present aliquot higher of the one than the estimates on the low income families to the step that the aliquot ones observed of such categories of tributes are below of that they would have for the families richest when taken in consideration the principle of the equal sacrifice this confirmation is valid in such a way for the tax structure current how much for the effective one in middle of the decade of 1970 the results show that the brazilian tax system does not respect the capacity of payment of the families fact that contributes for the maintenance of the indices of concentration of income in landings elevated

income and outcomes a structural model of intrahousehold allocation there is evidence from several sources that one cannot treat many person households as a single decision maker if this is the case then factors such as the relative incomes of the household members may affect the final allocation decisions made by the household we develop a method of identifying how incomes affect outcomes given conventional family expenditure data the basic assumption we make is that household decision processes lead to efficient outcomes we apply our method to a sample of canadian couples with no children we find that the final allocations of expenditures on each partner depend significantly on their relative incomes and ages and on the level of lifetime wealth

measurement of income inequality experimental test by questionnaire abstract we reconsider some of the basic assumptions of the literature on inequality analysis students views on the meaning of inequality comparisons were elicited by means of a questionnaire involving both numerical and verbal questions the responses suggest that two important axioms the principle of transfers and decomposability are not universally accepted

consumption and capital market imperfections an international comparison the excess sensitivity of consumption to current income fluctuations is higher in countries where consumers borrow less low levels of consumer debt can result either from capital market imperfections or from a low demand for loans the evidence suggests that the former view is more appropriate than the latter and thus supports the hypothesis that excess sensitivity may be attributed to liquidity constraints rather than to other factors copyright 1989 by american economic association

aggregate consumption behaviour and liquidity constraints the canadian evidence this paper considers a general permanent income model in which a fraction of consumers in the economy is liquidity constrained consumption growth rate for these individuals is related to the growth rate of their income and the level of real interest rates the interest rate coefficient is predicted to be smaller in the presence of liquidity constraints empirically liquidity constraints are found to be important and the estimated intertemporal elasticity of substitution parameter is much larger than the one obtained by estimating the standard representative agent model lastly there is some evidence of structural changes over the sample period which are associated with the 1982 recession

the effects of in work benefit reform in britain on couples theory and evidence this paper examines the effects of the working families tax credit wftc on couples in britain we develop a simple model of household decisions which explicitly accounts for the role played by the tax and benefit system its main implications are then tested using panel data from the british household panel survey collected between 1991 and 2002 overall the financial incentives of the reform had negligible effects on a wide range of married mothers decisions such as eligible working at least 16 hours per week and full time employment working at least 30 hours per week employment transitions childcare use and divorce rates women s responses however were highly heterogeneous depending on their partners labour supply and earnings mothers married to low income men showed larger responses in employment especially if they had younger children they were more likely to remain in the labour force and had higher rates at which they entered it while more likely to receive the tax credit they also experienced a greater risk of divorce we find virtually no effect for women with higher income husbands likewise there are no statistically significant responses among married men