regional inequalities in europe have they really been decreasing inequalities within the european community are analysed both at the national and the regional level from 1984 to 1988 based on the per capita income levels some convergence has been occurring amoung ec national economies however some regions seem to have been carrying the burden of closing the gap among nations performances the role of migration is analysed in some countries migration has been a factor tending to disguise the tendencies going on thereby promoting a misleading idea of regional convergence

uncertainty and optimal taxation in defense of commodity taxes abstract this paper re examines the theory of optimal commodity taxation in the presence of a linear income tax under wage uncertainty there are two categories of goods the consumption levels in one group are committed to before the resolution of uncertainty and those of the other after the paper i characterizes the structure of the optimal commodity taxes in view of the insurance they provide against random wage movements ii proves that optimal taxation requires a mix of differential commodity taxes and a uniform lump sum tax and iii demonstrates that the post uncertainty goods should face a positive tax rate which is higher than the tax rate on the pre committed goods

the regional dimension of competitiveness in manufacturing productivity employment and wages in northern ireland and the united kingdom borooah v k and lee k c 1991 the regional dimension of competitiveness in manufacturing productivity employment and wages in northern ireland and the united kingdom reg studies 25 219 229 the regional dimension of competitiveness in manufacturing industry is examined by comparing the uk with one of its poorest regions northern ireland an overview is provided of total factor productivity and real wage developments in northern ireland and the uk over the last two decades these developments are then investigated econometrically through the estimation of labour demand and wage equations the paper identifies a number of factors which may have eroded the competitiveness and hence the employment prospects of the region relative to the uk as a whole over the period borooah v k et lee k c 1991 la competitivite de l industrie manufacturiere sous un optique regional productivite emploi et salaires en irlande du nord et au royaume uni reg studies 25 219 229 on examine les aspects region

optimal policy and the risk properties of human capital reconsidered abstract this paper considers how optimal education and tax policy depends on the risk properties of human capital a key feature of human capital investments is whether they increase or decrease wage risk in a benchmark model it is shown that this feature alone determines whether a constrained optimal allocation should be characterized by a positive or a negative education premium in the same model a positive intertemporal wedge is optimal the robustness of these results is explored in two generalizations nonobservability of education and nonobservability of consumption finally policies that implement the constrained efficient allocations are considered

firm incentives to promote technological change in pollution control reply abstract the process of technological change in pollution control is broken into three basic steps innovation diffusion and optimal agency response firm incentives to promote these steps are then examined under five regulatory regimes direct controls emission subsidies emission taxes free marketable permits and auctioned marketable permits on a relative basis emission taxes and auctioned permits provide the highest firm incentives to promote technological change at times free permits generate lower incentives direct controls which are common regulatory tools usually provide the lowest relative firm incentives to promote technological change

agricultural land values and the value of rights to future land development we investigate the inuence of fu ture land development on current agricultural land values from a theoretical model of land markets we derive a reduced form expression for agricultural land values in terms of observable variables this result dictates the speci cation of our econometric model and we nd strong sup port for the model in an application to new york state the estimated model together with a spa tial interpolation algorithm is used to generate a surface of estimated development rights values for orange county this approach overcomes several problems that arise with the use of stan dard appraisal methods to value conservation easements jel q24

the effects of potential land development on agricultural land prices abstract we conduct a national scale analysis of the determinants of agricultural land values the theoretical basis for the study is a spatial city model with stochastic returns to future land development the empirical model of agricultural land prices is estimated with a cross section on approximately three thousand counties in the contiguous us the results provide evidence that option values associated with irreversible and uncertain land development are capitalized into current farmland values for each county we decompose the current agricultural land value into components measuring rents from agricultural production and rents from future land development

regulatory balancing and the efficiency of green r d we identify and analyse several dynamic implications of setting environmental standards such as to balance marginal costs and benefits the adoption of such a regulatory approach is shown to effect i the speed of improvement of abatement technologies ii the direction in a sense to be defined of that improvement iii its source and the distribution of the rents from it and iv the rate of development of defensive averting technologies existing views are thoroughly synthesised in the context of a simple diagrammatic model several new results are derived and at least one conventional wisdom questioned the message of the analysis for legislators and regulators is that cost benefit balancing should be done with care

investments in human capital wage uncertainty and public policy abstract the importance of risk characteristics of human capital for the design of tax and education policy is explored wages are uncertain and education while increasing the expected wage may increase or decrease wage variance the government has strong reasons to encourage human capital formation in the latter case partly due to the insurance effect of human capital and partly due to the way the individuals under a plausible restriction on prudence respond to changes in risk the analysis is illustrated using two models of education one where education helps the individuals make better occupational choices and a standard risk augmented becker type model

market power in a gis based hedonic price model of local farmland markets buyers of farmland are usually interested in parcels for sale that are close to their own farms with a limited number of parcels for sale this may lead to market power in local farmland markets the objective of this paper is to investigate whether market power affects farmland prices hedonic price models are adapted to allow for local market power of either sellers or buyers a distinction is made between rural and urban farmland markets the results provide evidence of market power effects in rural farmland markets however for farmland in urban areas market prices are dominated by speculation effects

potential for private cost increasing technological innovation under a tax based economic incentive pollution control policy a criticism of the current pollution control policy is its lack of incentive for technological innovation the author argues that the implementation of a tax based economic incentive policy may have its pay off in terms of lower real control outlays but this makes it possible for total private compliance costs resource costs and tax or transfer costs to actually increase upon the introduction of some new less expensive control technologies he presents a numerical illustration of this phenomenon then derives the conditions under which such cost increases may occur cost increasing technological innovations could generally be avoided if the tax incentive is coupled with a net revenue lid for the pollution control authorities 4 references 3 tables

pollution abatement subsidies and the eco industry this paper considers the combination of pollution taxes and abatement subsidies when some polluting firms procure their abatement goods and services from an oligopolistic eco industry the regulator must here cope with two simultaneous price distortions one that comes from pollution and the other which is caused by the eco industry s market power in this context we show that taxing emissions while subsidizing polluters abatement efforts cannot lead to first best but the opposite occurs provided it is the eco industry s output which is subsidized when public transfers also create distortions welfare can be higher if the regulator uses only an emission tax but subsidizing abatement suppliers while taxing emissions remains optimal when the eco industry is concentrated

fiscal implications of effluent charges and input taxes abstract taxing inputs that cause pollution is an alternative to effluent fees the literature has identified an economic relationship between these two market approaches that results in equivalent emission reductions however the fiscal implications of each approach may differ considerably this investigation shows total revenues collected from polluters under each instrument are identical only if the production of residuals exhibits constant returns to scale empirical estimates of the difference in revenues collected are presented for the case of deep percolated nitrate losses in irrigated agriculture

how pollution taxes may increase pollution and reduce net revenues this paper develops a positive theory of pollution taxation by a federal authority when pollution abatement subsidies are used by local governments environmental and industry lobby groups influence governments with campaign contributions first pollution may increase in the pollution tax because the abatement subsidy increases decreases with the tax and pollution increases decreases in the abatement subsidy this occurs because the lobbying incentives change at a pollution tax reform second pollution taxes may reduce net revenues because subsidy expenditures rise third pollution may increase simultaneously as net revenues fall finally the welfare effect of a pollution tax may be negative

regional earnings convergence the case of northern ireland black b 1985 regional earnings convergence the case of northern ireland reg studies 19 1 7 this paper analyses the rapid increase in the earnings of northern ireland male manual workers relative to the united kingdom average which has taken place in recent decades it identifies four factors which help explain this convergence first there has been a big increase in hours worked in northern ireland relative to the uk average since 1961 second the influence of changing industrial structure is highlighted in addition the impact of a range of government policies and developments in the institutional process of pay determination on earnings is examined the paper concludes that the convergence reflects the erosion of regional distinctiveness as earnings levels are increasingly influenced by national factors

production uncertainty and pollution there has been considerable interest in two sector models in which the production of one of the goods is subject to uncertainty the major papers in this area are by rothenberg and smith 13 batra 1 britto 3 diamond 5 mills 12 and harford and park 8 in the latest of these papers harford and park 8 41 build on a model in mills 12 to show that if constant relative risk aversion r which is mathematically analogous to the pratt arrow measure is less than exceeds or equal to unity the direction of efficient resource flow under uncertainty as compared to certainty is away from the risky sector toward the risky sector or unchanged respectively in their model as in mills 12 the preferences of consumers are represented by a community expected utility function in the present two sector model the risky sector is an industry that is adversely affected by air pollution which is a by product of production in the other industry although there is a deterministic relation between the output and emissions of the polluting stable sector the damage caused to the other sector as a result of any given level of emissions depends upon random variables such as mixing height and wind velocity and is therefore stochastic it is not intuitively obvious whether the results of harford and park 8 hold if the uncertainty in the risky sector is the consequence of production in the stable sector in fact there is substantial dissimilarity in the results if the measure of risk aversion r is less than unity the efficient direction of resource flow is generally though not always toward the risky polluted sector if r equals unity the results also differ with resources shifting under uncertainty in the direction of the risky polluted sector only if r exceeds unity are the results always the same in both models with resources flowing toward the risky sector this paper presents the marginal condition such that under uncertainty the optimal combination of outputs includes less of the stable polluting good and more of the risky pollution sensitive good than would be the case if pollution damage were anticipated with certainty if this marginal condition does not hold the risk averse community may prefer either more or less of the polluting good a narrowed interpretation of the marginal condition is then used to predict the special case in which the efficient flow of resources under uncertainty is toward the polluting sector

consequences of the clean water act and the demand for water quality since the 1972 u s clean water act government and industry have invested over 1 trillion to abate water pollution or 100 per person year over half of u s stream and river miles however still violate pollution standards we use the most comprehensive set of files ever compiled on water pollution and its determinants including 50 million pollution readings from 240 000 monitoring sites and a network model of all u s rivers to study water pollution s trends causes and welfare consequences we have three main findings first water pollution concentrations have fallen substantially between 1972 and 2001 for example the share of waters safe for fishing grew by 12 percentage points second the clean water act s grants to municipal wastewater treatment plants which account for 650 billion in expenditure caused some of these declines through these grants it cost around 1 5 million 2014 dollars to make one river mile fishable for a year we find little displacement of municipal expenditure due to a federal grant third the grants estimated effects on housing values are smaller than the grants costs we carefully discuss welfare implications

the dynamic study on firm s environmental behavior and influencing factors an adaptive agent based modeling approach employing an adaptive agent based modeling approach the present study explored the evolvement of firms environmental behavior and influencing factors using empirical data from 167 firms in china the simulation results revealed that firms environmental behavior followed this evolvement path defensive behavior preventive behavior and enthusiastic behavior computational experiments indicated that with increased financial ability and level of environmental preparedness the number of firms in all three categories of environmental behavior increased and so did their profits with increased public pressure the number of firms with defensive environmental behavior and their profits decreased but the number of firms with preventive and enthusiastic environmental behavior and their profits increased on the other hand when managers education level increased the number of firms with defensive behavior deceased but their profits increased slightly though the number of firms with preventive and enthusiastic behavior and their profits increased sharply in addition with the increased regulation level the number of firms with a different category of environmental behavior and their profits decreased finally with increased financial subsidy and market share the number of firms with different behavior and their profits were modified slightly

wage determination in britain is there a local dimension church a and hutchinson g 1989 wage determination in britain is there a local dimension reg studies 23 289 300 this study presents an empirical regression analysis of wage determination in the five labour markets of motherwell preston reading torquay and the london borough of newham the data source is a newly available questionnaire survey of approximately 1 000 establishments undertaken in 1984 5 the explanatory variables include the plant s size ownership industrial type three proxies for labour quality the proportion of youths the proportion of females and the proportion of part time workers and a union recognition dummy variable the results discuss the relative importance of both national and local influences on pay levels church a et hutchinson g 1989 la determination des salaires en grande bretagne est ce qu il y a un optique local reg studies 23 289 300 cet article presente une analyse empirique de regression de la determination des salaires dans cinq bassins d empl

education and optimal dynamic taxation the role of income contingent student loans we study the optimal design of integrated education finance and tax systems the distribution of wages is endogenously determined by the costly education decisions of heterogeneous individuals before labor market entry consistent with empirical evidence this human capital investment decision is risky we find that an integrated education and tax system in which the government provides education loans to young individuals coupled with income contingent repayment can always be designed in a pareto optimal way we present a simple empirically driven application of the framework to us data in which individuals make a college entry decision we find the optimal repayment schemes for college loans can be well approximated by a schedule that is linearly increasing in income up to a threshold and constant afterwards so although the full optimum could lead to complicated non linear schedules in theory very simple instruments can replicate it fairly well the welfare gains from income contingent repayment are significant

measuring heterogeneous preferences for preserving farmland and open space abstract public preferences for environmental policies often vary among individual citizens according to their socio economic characteristics and attitudes toward environmental programs most researchers account for socio economic characteristics when conducting public preference surveys but do not account for differences in preferences that transcend socio economic categories identifying the public s attitudes regarding environmental programs and the role they play in shaping individuals preferences for policy alternatives can assist policy makers in developing programs that are consistent with public expectations this paper uses factor analysis and a discrete choice model to describe differences in public preferences that result from different attitudes regarding the goals of programs designed to preserve farmland and open space results describe policy implications that are not apparent when using models that address socio economic characteristics alone

the measurement of capital services in production for uk regions 1968 78 harris r i d 1983 the measurement of capital services in production for uk regions 1968 78 reg studies 17 169 180 the purpose of this study is to obtain meaningful measures of the factor input capital so that estimation of the production function is possible at a regional level firstly gross stock measures are converted into a net stock series and the series obtained are then adjusted for levels of utilization finally some use of the data is made to look at various issues such as which regions have experienced rapid growth in capital stocks the composition of these stocks and changes in the capital labour ratios which have resulted

optimal taxation of risky human capital in a two period life cycle model with ex ante homogeneous households earnings risk and a general earnings function we derive the optimal linear labor tax rate and optimal linear education subsidies the optimal income tax trades off social insurance against incentives to work education subsidies are not used for social insurance but they are only targeted at offsetting the distortions of the labor tax and internalizing a fiscal externality both optimal education subsidies and tax rates increase if labor and education are more complementary because education subsidies indirectly lower labor tax distortions by stimulating labor supply optimal education subsidies taxes also correct non tax distortions arising from missing insurance markets education subsidies internalize a positive negative fiscal externality if there is underinvestment overinvestment in education because of risk education policy unambiguously allows for more social insurance if education is a risky activity however if education hedges against labor market risk optimal tax rates could be lower than in the case without education subsidies

an experimental analysis of the effectiveness of an environmental assurance bonding system on player behavior in a simulated firm it has long been recognized that the present command and control methods for pollution abatement are inefficient using market mechanisms for environmental management is a promising alternative to the direct regulatory approach market mechanisms are just beginning to appear in u s environmental policy for example tradable permit schemes are being developed and implemented for some air pollutants under the amended clean air act various other forms of taxes and tradable permits have been proposed however these systems do not address the large uncertainty inherent in most environmental problems one mechanism currently being studied to address uncertainty more effectively is a flexible environmental assurance bonding system designed to incorporate environmental criteria and uncertainty into market incentives this study uses an experimental approach employing an interactive computer game simulation model with human players to examine the effectiveness of the assurance bonding system under varying degrees of uncertainty an environmental cost efficiency index ecei or profit per unit waste is used to measure player performance preliminary results indicate that players are more successful under the assurance bonding system in terms of ecei than under the simulated current system

payroll tax financed social insurance with variable retirement the optimal relationship between retirement benefits and retirement age is derived the model assumes ex ante identical workers zero one labor supply no private savings wages and payroll taxes constant over life random onset of an inability to work and the impossibility of distinguishing those unable to work from those choosing retirement this formulation is meant to capture some issues for retirement programs where governments commonly do not measure disability e g ages 65 70 with intertemporally additive preferences optimal benefits rise with the age of retirement but more slowly than would be actuarially fair a nonadditive example is also considered

uncertainty optimal taxation and the direct versus indirect tax controversy this paper examines how the presence of uncertainty affects the design of tax policy when both indirect taxes and a general income tax are available to the government there are two categories of goods the consumption levels in one group are committed to before the resolution of uncertainty and those of the other after the paper proves that contrary to a b atkinson and j e stiglitz s 1976 result differential commodity taxation remains a useful instrument of optimal tax policy even if preferences are separable between labor and produced goods copyright 1995 by royal economic society

optimal indirect and capital taxation we consider an environment in which agents skills are private information and follow arbitrary stochastic processes we prove that it is typically pareto optimal for an individual s marginal benefit of investing in capital to exceed his marginal cost of doing so this wedge is consistent with a positive tax on capital income we also prove that it is pareto optimal for the marginal rate of substitution between any two consumption goods to equal the marginal rate of transformation this lack of a wedge is consistent with uniform taxation of consumption goods within a period

when subsidies for pollution abatement increase total emissions in a first best deterministic world it is well known 2 28 30 that a unit tax on emissions equal to marginal damage is an efficient mechanism for internalizing the damages caused by polluting firms a unit subsidy for emissions abated also equal to marginal pollution damage has the same desirable property but only in the short run in the long run such subsidies induce polluting firms to operate at too small a scale and attract an excessive number of new firms to the polluting industry this can have the perverse result that there are more emissions when abatement is subsidized than when it is not nevertheless economists have been reluctant to give up entirely on the subsidy approach recognizing with oates 23 290 that polluters will obviously be far more receptive to measures that assist with the costs of pollution control than to those that place the burden upon themselves it is therefore not surprising that economists have continued to look for and find new justifications for subsidizing pollution control thus mestelman 20 187 argues that the subsidy scheme may be a second best alternative for externality control when the direct taxation alternative is not politically viable mchugh 17 64 shows that subsidies for pollution abatement expenditures can be a useful instrument in the case of cost increasing technological innovations harford 6 demonstrates that subsidies for pollution control inputs may be efficient when enforcement is sufficiently costly harford 7 makes still another argument for subsidies in the case in which the day to day performance of abatement equipment is uncertain but the uncertainty can be reduced by maintenance expenditures finally there are schemes for combining subsidies and taxes 14 26 given the continuing interest in subsidies it is important to examine carefully the disturbing case in which subsidies increase rather than decrease total emissions

optimal wage and income taxation with wage uncertainty optimal taxation in a two period model with human capital investment and second period wage uncertainty is analyzed a proportional tax on wages dominates lump sum taxation and the socially optimal level of human capital exceeds that which individuals choose a tax on interest income may raise welfare by encouraging investment in human capital the interest income tax reduces the difference between returns to physical and human capital from individuals inability to reduce human capital risk through diversification a positive interest income tax rate may therefore be optimal even with an optimal wage tax by encouraging m ore investment in human capital copyright 1987 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

the political economy of pollution taxes in a small open economy abstract this paper develops a positive theory explaining pollution tax policy outcomes in a small open economy the equilibrium tax rate depends on lobby group membership the relative importance of lobbying activities and the tax elasticity of pollution the equilibrium properties are investigated the model is extended to incorporate pollution abatement and a pollution abatement subsidy we show that total pollution may be increasing in the pollution abatement subsidy rate this effect arises because the equilibrium pollution tax rate may be decreasing in the subsidy rate due to altered political influence of the lobby groups in the political equilibrium

social background education and inequality the role parents education plays for the educational achievements of children is a source of unequal opportunities through this channel the number of educated affects the options of future cohorts creating a social multiplier effect making improvements in education self reinforcing policies to compensate for inequalities of opportunities public education or transfers have very different implications transfers not only reduce inequality on impact but also reduce social mobility while public education even if a perfect substitute to private education works in the opposite direction social impediments to education are similar to a market imperfection and publicly provided education may lead to a pareto improvement jel d3 i2 h2 h4

redistribution and education subsidies are siamese twins abstract we develop models of optimal linear and non linear income taxation with endogenous human capital formation to explore optimal education subsidies optimal subsidies on education ensure efficiency in human capital accumulation and thus play an important role in alleviating the tax distortions on learning induced by redistributive policies if the government cannot verify all investments in human capital education policy offsets some but not all tax induced distortions on learning non pecuniary educational costs benefits may increase decrease subsidies on education especially if they are complementary to work effort

risky human capital and deferred capital income taxation abstract we study the structure of optimal wedges and capital taxes in a dynamic mirrlees economy with endogenous distribution of skills human capital is a private stochastic state variable that drives the skill process of each individual building on the findings of the labor literature we construct a tractable life cycle model of human capital evolution with risky investment and stochastic depreciation in this setting we demonstrate the optimality of a a human capital premium i e an excess return on human capital relative to physical capital b a large intertemporal wedge early in the life cycle and c a non zero intratemporal wedge even at the top of the skill distribution at all dates except the last date in the life cycle the main implication for the structure of optimal linear capital taxes is the necessity of deferred taxation of physical capital the average marginal tax rate on physical capital held in every period is zero in present value however expected capital tax payments do not equal zero in every period necessarily agents face negative expected capital tax payments early in the life cycle and positive expected capital tax payments late in the life cycle

the value of remoteness a hedonic estimation of ranchette prices abstract throughout the western united states production ranches are being subdivided into recreation oriented ranchettes this change has dramatic impacts on local environmental and economic viability ranchettes fall in a gap in the economic literature between production agriculture and residential uses this paper presents the first hedonic model for ranchettes introducing the use of remote sensing vegetative indices and the use of sale status of adjacent ranchettes as explanatory variables parcel level sale data in yavapai county arizona is combined with satellite greenness indices it is found that increased greenness raises sale prices access to roads cities and neighbors also increase sale prices implying that isolation is a disamenity and that it may be beneficial for policymakers to encourage ranchette grouping

production externalities and corrective subsidies a general equilibrium analysis abstract several recent attempts have been made to demonstrate that corrective subsidies and taxes do not have symmetric allocation effects these demonstrations have utilized graphical partial equilibrium analysis in this paper a general equilibrium model is introduced to show that a standard partial equilibrium result may be incorrect and that subsidies may lead to equilibrium states which are socially preferred to the status quo position

ex post evaluation of an earmarked tax on air pollution in this paper we do an ex post evaluation of the french tax on air pollution the revenues of this tax were redistributed to polluters in the form of subsidies to abatement technologies and the policy is a typical example of an earmarked tax we use a two stage estimation procedure on an unbalanced panel data set of 226 plants from three industrial sectors that are some of the main contributors to nitrogen oxide and sulfur dioxide emissions the results indicate that the overall environmental effectiveness of this particular tax subsidy scheme can be questioned