an experiment on the pure theory of consumer s behaviour by checking whether consumer demand satisfies the axioms of revealed preference one can test the empirical validity of the neoclassical theory of consumer behaviour however applying the axioms to actual consumer purchase data is difficult if not impossible since it poses serious problems of both a methodological and a practical nature after commenting on the few existing empirical studies in this field we summarise the results from an experimental approach to revealed preference theory data were obtained through a controlled experiment that involved real consumption of the goods chosen we find that most subjects violated the axioms

carbon taxation when climate affects productivity optimal carbon taxation is evaluated in a model where climate change affects productivity with a numerical us economy model with preexisting taxes the optimal carbon tax is found to exceed marginal social damage by 53 percent and marginal private damage the sum of households marginal willingness to pay by 73 percent the welfare gain from optimal carbon taxation is estimated at 3 58 billion per year when marginal damages are 40 ton employment also increases setting the carbon tax at the pigouvian rate raises welfare by only 3 17 billion the contrasting results in the tax interaction literature are due to the use of marginal private damage when applied to amenity externalities

homothetic efficiency theory and applications we provide a nonparametric revealed preference approach to demand analysis based on homothetic efficiency homotheticity is widely assumed often implicitly because it is a convenient and often useful restriction however this assumption is rarely tested and data rarely satisfy testable conditions to overcome this we provide a way to estimate homothetic efficiency of consumption choices the method provides considerably higher discriminatory power against random behavior than the commonly used afriat efficiency we use experimental and household survey data to illustrate how our approach is useful for different empirical applications and can provide greater predictive success

the death of the pigovian tax policy implications from the double dividend debate recently economists appear to have abandoned a central precept of environmental policy optimal environmental taxes are equal to marginal environmental damage med as a consequence of labor market distortions optimal environmental taxes are now generally argued to typically lie below med and given realistic policy constraints on optimal tax reform sometimes well below med this new consensus is reflected in over a dozen papers published without rebuttal in prestigious economics journals in important survey articles and in policy oriented manuscripts how was it possible that such a radical transformation of economic thinking occurred with essentially no debate in the literature

optimal environmental charges taxes easy to estimate and surplus yielding the estimation of the optimal charges taxes on environmental disruption and the financing of the spending on the abatement of environmental disruption are important practical problems this paper shows that for most cases where some abatement is desirable both the estimation and the financing problems may be easily solved it is desirable to charge disruption at least at the marginal cost of abatement which is easier to estimate than the marginal damage of disruption and such a charge will normally yield total revenue in excess of the amount of abatement spending

tax interaction effects environmental regulation and rule of thumb adjustments to social cost preexisting distortions in factor markets complicate the estimation of the social welfare effects of regulatory interventions the existence of these tax interaction effects ties suggests that general equilibrium ge approaches should be used to evaluate regulatory policies however formal ge analysis is not always feasible for the numerous environmental regulations proposed by federal state and local agencies the question addressed in this paper is whether an empirically based rule of thumb upward adjustment factor is appropriate to properly scale social cost estimates in environmental policy we argue that such rule of thumb adjustments are significantly less reliable than estimates based on a detailed general equilibrium analysis because of the uncertainty about both the magnitude and sign of the social cost distortion in addition to addressing this question the paper gives an overview of ties and their relevance to environmental policy

female labor supply in the context of inflation inflation has become in the 1970 s an important economic phenomenon that must be taken into account in analyzing the determinants of labor supply trends traditional labor supply theory has focused on the overriding importance of real wage growth as a primary determinant of both the long run secular decline in hours of work and the postwar increase in the labor force participation rate of married women within this context any labor supply effects of price level changes have been subsumed under the overall effect of real wages however despite unusually rapid price increases as well as stagnation in the growth of productivity and real wages in the last decade the growth in women s labor force participation has continued and if anything accelerated in the last decade thus it is clear that today factors other than real wage growth must lie behind this continuing upward trend inflation is well worth exploring as a possible independent influence on labor supply because of both its growing visibility and the frequency with which one hears comments along the lines of in these inflationary times a family needs two salaries to make ends meet our objective in this paper is to explore the possible effects of inflation on women s labor supply trends as a first step in this direction we present some empirical results relating changes in the labor force participation rates of women in various age groups to inflation as well as other independent variables covering the period 1956 77 inflation clearly appears to have an effect on labor force participation rates above and beyond the effect it generates through reducing the real wage by next examining the primary sources of women s labor force growth in the last decade and their implications for long run labor supply we suggest the likely importance of inflationary expectations in sustaining the long term growth of women s labor supply particularly in the prime age group

full scale real tests of consumer behavior using experimental data abstract this paper reports on the results of three experiments based on the neoclassical theory of consumer behavior all these experiments were carried out with the aim of simulating real world behavior nonparametric tests applying the theory of revealed preference show that a significant number of individuals exhibit inconsistent behavior if nearly optimizing behavior is postulated then most of these inconsistencies disappear but random choices produce almost the same results the hypothesis of a representative consumer statistical average behavior seems a more fruitful approach

rising u s earnings inequality and family labor supply the covariance structure of intrafamily earnings this paper studies the labor supply contributions to individual and family earnings inequality during the period of rising wage inequality in the early 1980 s working couples have positively correlated labor market outcomes which are almost entirely attributable to permanent factors an intertemporal family labor supply model with this feature is used to estimate labor supply elasticities for husbands of 0 05 and wives of 0 40 this implies that labor supply explains little of the rising annual earnings inequality for married men but over 20 percent of the rise in family inequality and 50 percent of the modest rise in female inequality

the present value criterion and environmental taxation the suboptimality of first best decision rules this paper examines the links between environmental taxes and distortionary taxation in a dynamic model of climate change and economic growth under first best conditions labor and capital would remain untaxed and carbon dioxide emissions would be taxed at a rate equal to the present value marginal cost they impose on future society setting the discount rate equal to the marginal productivity of capital under secondbest conditions however this decision rule substantially understates optimal emissions taxes when the resulting revenues are used to provide targeted cuts in distortionary taxes conversely relatively low emissions taxes are economically justified given lump sum revenue recycling

labor supply and the double dividend abstract a series of recent articles have argued that environmental taxes and cap and trade permit systems generate large distortions in the labor market the claim is made that the higher prices for dirty goods induced by these incentive based systems generate a tax interaction effect leading to reductions in labor supply that are generally on net welfare reducing for this reason it is argued a double dividend seldom exists however price level increases both by lowering family income and by reducing cross spousal wage substitution effects will tend to have offsetting positive impacts on labor supply these effects are large enough to convert negative labor supply responses to rising prices into positive ones the empirical literature also supports a positive relationship between price level increases and labor supply these observations cast doubt on a central critical assumption underlying the critique of the double dividend in the tax interaction effect literature

optimal income distribution rules and representative consumers this paper derives observable properties of economies with optimal income distribution rules that specify consumers incomes as functions of aggregate income and prices optimality implies that the aggregate demand function is generated by a single representative consumer cf samuelson 1956 we derive an additional implication which when consumers receive fixed shares of aggregate income requires that the consumers demands become more dispersed when aggregate income rises this last condition has empirical support the results relate the representative consumer s preferences to a version of kaldor s compensation criterion and show when both can be used for normative analysis without internal inconsistency

when can carbon abatement policies increase welfare the fundamental role of distorted factor markets abstract this paper employs analytical and numerical models to assess the welfare effects of a revenue neutral carbon tax and nonauctioned carbon emissions permits taking into account preexisting tax distortions in factor markets the presence of preexisting taxes significantly raises the general equilibrium costs of both policies this cost increase is much greater under emissions permits since this policy does not generate revenues to reduce distortionary taxes under our central estimates emissions permits cannot increase welfare unless environmental damages exceed about 18 per ton of carbon in contrast an appropriately scaled carbon tax is welfare improving so long as environmental damages are positive

china s one belt one road initiative the impact of trade facilitation versus physical infrastructure on exports the one belt one road obor project is perhaps china s most significant international relations initiative in recent times it is based on openness harmony inclusivity mutual benefit and market operations and aims to connect the economically vibrant east asia and the developed europe by land and by sea and in the process it brings growth and development to tens of countries along the modern silk routes in this paper we compare the impact of the main initiatives of obor namely enhancements in physical infrastructure and improvements in border administration on the trade of countries that have signed on to this project especially countries along the six economic corridors we find overwhelming evidence that shows improvements in border administration has the greatest impact on exports of corridor countries although physical infrastructure is important for trade the chinese government should place equal attention to improvements in trade facilitation to ensure trade routes operate seamlessly across the various corridors

are patient regarding preferences stable evidence from a laboratory experiment with physicians and medical students from different countries abstract we quantify patient regarding preferences by fitting a bounded rationality model to data from an incentivized laboratory experiment where chinese medical doctors german medical students and chinese medical students decide under different payment schemes we find a remarkable stability in patient regarding preferences when comparing subject pools and we cannot reject the hypothesis of equal patient regarding preferences in the three groups the results suggest that a health economic experiment can provide knowledge that reach beyond the student subject pool and that the preferences of decision makers in one cultural context can be of relevance in a very different cultural context

optimal environmental taxation in the presence of other taxes general equilibrium analyses this paper examines the optimal setting of environmental taxes in economies where other distortionary taxes are present we employ analytical and numerical models to explore the degree to which in a second best economy optimal environmental tax rates differ from the rates implied by the pigovian principle according to which the optimal tax rate equals the marginal environmental damages both models indicate contrary to what several analysts have suggested that the optimal tax rate on emissions of a given pollutant is generally less than the rate supported by the pigovian principle moreover the optimal rate is lower the larger are the distortions posed by ordinary taxes numerical results indicate that previous studies may have seriously overstated the size of the optimal carbon tax by disregarding pre existing taxes this abstract was borrowed from another version of this item

graduate education in ecological economics abstract interest in graduate education in ecological economics is increasing however no formal plan of study for a phd in ecological economics has been disseminated the lack of a formal plan is problematic as the field of ecological economics matures interest grows and new programs are being developed this paper attempts to fill a void by creating a program of study addressing the proficiencies a graduate student in ecological economics should have upon completion of his her phd based on the us educational system the plan of study presented in this paper has been developed to make the graduate of an ecological economics program as competitive on the labor market as students awarded traditional economics degrees the plan i describe is created to meet the requirements necessary for a phd in ecological economics further fields of specialization are suggested to complement the core of an ecological economics program to enhance the education process and to give the student with an ecological economics degree a higher level of marketability