the merit order effect of wind and photovoltaic electricity generation in germany 2008 2016 estimation and distributional implications abstract generation from renewable energy sources in germany has experienced a considerable uptake in recent years mainly responsible for this development is the german renewable energy sources act erneuerbare energien gesetz eeg this paper considers redistributive implications of the eeg for different electricity consumers using time series regression analysis we show that electricity generation by wind and pv has reduced spot market prices considerably by 6 mwh in 2010 rising to 10 mwh in 2012 we use these results to build a near term forecasting tool for merit order effects projected to reach 14 16 mwh in 2016 on the other hand the costs of the eeg are passed forward to consumers in the form of a surcharge our findings highlight significant redistributive transfers under the current design of the eeg in particular some energy intensive industries are benefiting from lower wholesale electricity prices whilst being largely exempted from contributing to the costs of the scheme we also highlight implications of our results for other areas for reform of the eeg such as adequate remuneration mechanisms that ensure efficient operation and investment decisions are made under the scheme more generally these findings suggest that policy makers need to integrate distributional assessments into policy design and implementation

measuring the impacts of teachers ii teacher value added and student outcomes in adulthood abstract are teachers impacts on students test scores value added a good measure of their quality this question has sparked debate partly because of a lack of evidence on whether high value ad

the effect of income taxation on labor supply in the united states the effect of income taxation on the labor supply of prime age married men and women in the united states is examined using econometric methods similar to those used in the influential work of jerry hausman male labor supply is found to be relatively invariant to the net wage and virtual income in all specifications estimated the estimated impact of taxation on the labor supply of married women depends critically on the method used to estimate the labor supply function estimated net wage and virtual income elasticities are considerably larger when data on nonparticipants are included than when the estimation is conducted conditional on hours being greater than zero

the value of nonindigenous species risk assessment in international trade abstract managing the introduction of nonindigenous species is becoming a major goal of policy makers at regional national and international scales here we investigate at the national level the ideal design and expected net benefits of a risk assessment program for evaluating the desirability of nonindigenous species imports we show how to enhance the statistical rigor of such a system by correcting a common non random sampling problem encountered in the data this correction enables model output to be interpreted in an economically relevant way and facilitates a theoretically rigorous characterization of the balance between trade and nonindigenous species establishment risk using reptiles and amphibians imported to the u s as a case study we characterize economic outcomes over a range of cases and demonstrate substantial expected returns to such a screening program relative to the current effectively open door policy our results are informative for the current debate in the u s about whether to require federal agencies to apply risk assessment before allowing a species for import the framework presented decomposes a complex argument about risk management into component economic and statistical parts allowing for debate and improved understanding over each element to inform the overall program in a transparent fashion

using elasticities to derive optimal income tax rates this paper derives optimal income tax formulas using compensated and uncompensated elasticities of earnings with respect to tax rates a simple formula for the high income optimal tax rate is obtained as a function of these elasticities and the thickness of the top tail of the income distribution in the general non linear income tax problem this method using elasticities shows precisely how the different economic effects come into play and which are the key relevant parameters in the optimal income tax formulas of mirrlees the optimal non linear tax rate formulas are expressed in terms of elasticities and the shape of the income distribution these formulas are implemented numerically using empirical earning distributions and a range of realistic elasticity parameters

assessing empirical approaches for analyzing taxes and labor supply recent surveys on the labor supply responses of men document a divergence in the estimates of substitution and income effects obtained using various estimation approaches generally studies accounting for nonlinear tax schedules in a static setting via a piecewise linear approach produce estimates that typically imply higher substitution and lower income responses than are suggested by empirical work applying other approaches this paper demonstrates that maximum likelihood estimation of a consumer choice problem with nonlinear budget sets implicitly relies on the satisfaction of inequality constraints that translate into behaviorally meaningful restrictions these constraints arise not as a consequence of economic theory but instead as a requirement to create a properly defined statistical model in the analysis of piecewise linear budget sets the implicit constraints required by maximum likelihood in estimation amount to imposition of slutsky conditions at all wage income combinations associated with kink points in the analysis of differentiable budget sets the tacit constraints invoked by maximum likelihood also involve inequality restrictions on slutsky terms the empirical work presented in this study supports the contention that these implicit constraints play a major role in explaining the discrepancies in estimates found in the literature on men s labor supply

decomposing trends in income volatility the wild ride at the top and bottom we use 2 year panels from the current population survey to provide a detailed accounting of family income volatility from 1980 to 2009 volatility doubled overall and the increase was most pronounced among the top 1 of the income distribution but in any given year the level of volatility among the bottom 10 exceeds that of the top the increased volatility comes from higher instability of head and spouse earnings other nonlabor income and from reduced covariance between these income sources with the tax system this suggests that current tax policy is less effective in mitigating income shocks than previous decades jel j31 i30

the relationship between hours of work and labor force participation in four models of labor supply behavior this article analyzes the relationship between hours of work and labor force participation lfp in heckman s model cogan s fixed cost model moffitt s minimum hours constraint model and a generalized version of heckman s model first the parameter restrictions between the lfp and reduced form hours of work equations are compared the models are then estimated and the results support the weakening of the link between the lfp and hours of work decisions one implication of the analysis is that heckman s model overstates the standard labor supply elasticities because it confounds the direct effect on labor supply with the participation effect

the importance of sample attrition in life cycle labor supply estimation we examine the importance of possible nonrandom attrition to an econometric model of life cycle labor supply using both a wald test comparing attriters to nonattriters and variable addition tests based on formal models of attrition estimates using the panel study of income dynamics show that nonrandom attrition is of little concern when estimating prime age male labor supply because the effect of attrition is absorbed into fixed effects in labor supply the wage measure and instrument set have much larger effects on the estimated labor supply function of prime age men than how one adjusts for panel attrition

estimating labour supply responses using tax reforms the 1980 s tax reforms and the changing dispersion of wages offer one of the best opportunities yet to estimate labor supply effects nevertheless changing sample composition aggregate shocks the changing composition of the tax paying population and discontinuities in the tax system create serious identification and estimation problems we develop grouping estimators that address these issues our results reveal positive and moderately sized wage elasticities we also find negative income effects for women with children

identifying the elasticity of taxable income we use matched panels from the current population survey along with a grouping instrumental variables estimator to provide new estimates of the elasticity of taxable income our identification strategy exploits the fact that federal and state tax reforms over the past three decades have differentially affected cohorts across states and over time we find that the elasticity is in the range of 0 4 0 55 the implication of our new estimates for tax policy is that the revenue maximising tax rate is nearly 30 percentage points lower than that obtained when we use the typical identification strategy in the literature

future wind and solar power market values in germany evidence of spatial and technological dependencies abstract achieving ambitious climate targets entails an extensive utilisation of renewable energy sources however due to weather dependent fluctuations generation from variable renewable energy vre sources is characterised by significantly lower market values in comparison to conventional technologies reinforced by a decline in electricity prices this development poses interesting questions as to its drivers and to what extent market values of wind and solar power can be influenced by the design of electricity markets against this background a scenario based analysis is conducted to trace the future development of market values using endogenously derived electricity prices considering different regional and technological vre diversification strategies and investments into vre technologies on a myopic basis the results show a continued decline in market values with increasing regional discrepancies indicating a growing importance of interregional interdependencies for assessing the profitability of vre furthermore from a system point of view a more distributed allocation of onshore wind capacities to contend with declining market values does not always prove to stabilise market values by facilitating a more constant feed in pattern contrary to expectation finally replacing onshore with offshore wind energy appears to be beneficial as it can lead to an overall increase in the market values of offshore onshore as well as pv generation technologies compared to other mitigation strategies this result raise interesting questions about the systemic economic value of offshore wind despite its higher lcoe in the context of market integration of vre

on the economics of electrical storage for variable renewable energy sources abstract the use of renewable energy sources is a major strategy to mitigate climate change yet sinn 2017 argues that excessive electrical storage requirements limit the further expansion of variable wind and solar energy we question and alter strong implicit assumptions of sinn s approach and find that storage needs are considerably lower up to two orders of magnitude first we move away from corner solutions by allowing for combinations of storage and renewable curtailment second we specify a parsimonious optimization model that explicitly considers an economic efficiency perspective we conclude that electrical storage is unlikely to limit the transition to renewable energy

toward obtaining a consistent estimate of the elasticity of taxable income using difference in differences abstract the elasticity of taxable income eti is a central parameter for tax policy debates this paper shows that mean reversion prevents most estimators employed in the literature from obtaining consistent estimates of the eti a new method is proposed that will resolve inconsistency due to mean reversion under testable assumptions regarding the degree of serial correlation in the error term using this procedure i estimate an eti of 0 858 which is about twice as large as the estimates found in the most frequently cited paper on this subject 13 the corresponding elasticity of broad income is 0 475

where the wind blows assessing the effect of fixed and premium based feed in tariffs on the spatial diversification of wind turbines abstract feed in tariffs fit are among the most important policy instruments to promote renewable electricity production the fixed price fit ffit which guarantee a fixed price for every unit of produced electricity and the premium based fit pfit which pay a premium on top of the market price are commonly implemented in the eu costs for balancing intermittent electricity production may be significantly higher with ffit than with pfit and ffit do not provide any incentive to produce electricity when marginal production costs are high in contrast pfit do provide strong incentives to better match renewable power output with marginal production costs in the system the purpose of this article is to assess the effects of the two tariff schemes on the choice of wind turbine locations in an analytical model we show that both the covariance between wind power supply and demand as well as between the different wind power locations matter for investors in a pfit scheme high covariance with other intermittent producers causes a decrease in market prices and consequently in revenues for wind power investors they are therefore incentivized to diversify the locations of wind turbines to decrease the covariance between different wind power production locations in an empirical optimization model we analyze the effects of these two different schemes in a policy experiment for austria the numerical results show that under a pfit scheme 1 spatial diversification is incentivized 2 the covariance of wind power production with marginal electricity production costs increases and 3 the variances of the wind power output and of residual load decrease if wind power deployment attains 10 of total national electricity consumption

match bias from earnings imputation in the current population survey the case of imperfect matching this article examines match bias arising from earnings imputation wage equation parameters are estimated from mixed samples of workers reporting and not reporting earnings the latter assigned earnings of donors regressions including attributes not used as imputation match criteria e g union are severely biased match bias also arises with attributes used as match criteria but matched imperfectly imperfect matching on schooling age flattens earnings profiles within education age groups and creates jumps across groups assuming conditional missing at random a general analytic expression correcting match bias is derived and compared to alternatives reweighting a respondent only sample proves an attractive approach

labor supply and taxes a survey i survey the male and female labor supply literatures focusing on implications for effects of wages and taxes for males i describe and contrast results from three basic types of model static models especially those that account for nonlinear taxes life cycle models with savings and life cycle models with both savings and human capital for women more important distinctions are whether models include fixed costs of work and whether they treat demographics like fertility and marriage and human capital as exogenous or endogenous the literature is characterized by considerable controversy over the responsiveness of labor supply to changes in wages and taxes at least for males it is fair to say that most economists believe labor supply elasticities are small but a sizeable minority of studies that i examine obtain large values hence there is no clear consensus on this point in fact a simple average of hicks elasticities across all the studies i examine is 0 30 several simulation studies have shown that such a value is large enough to generate large welfare costs of income taxation for males i conclude that two factors drive many of the differences in results across studies one factor is use of direct vs ratio wage measures with studies that use the former tending to find larger elasticties another factor is the failure of most studies to account for human capital returns to work experience i argue that this may lead to downward bias in elasticity estimates in a model that includes human capital i show how even modest elasticities as conventionally measured can be consistent with large welfare costs of taxation

elasticity of taxable income evidence from changes in municipal income tax rates in finland the elasticity of taxable income eti is a key parameter in income tax analysis both in terms of efficiency and tax revenue this paper uses finnish data to analyze the eti i use changes in flat municipal income tax rates as an instrument for overall changes in marginal tax rates this instrument is not a function of individual income and thus the eti estimates are less susceptible to bias caused by differential trends across the income distribution in general instruments used in previous studies do not have this feature my preferred estimate for the average eti is 0 21 this article is protected by copyright all rights reserved

measuring the benefits of foreign product variety with an accurate variety set abstract recent studies have used import data to assess the impact of foreign varieties on domestic prices and welfare we employ a market based data set on the u s automobile market that allows us to define goods varieties at a more precise level as well as discern location of production and ownership of varieties our estimates of price and welfare changes from new varieties in the u s automobile sector are twice as large as standard estimates when using our detailed market based data we also show that new varieties introduced by foreign owned affiliates provided an additional 70 welfare gain during our sample

the elasticity of taxable income with respect to marginal tax rates a critical review this paper critically surveys the large and growing literature estimating the elasticity of taxable income with respect to marginal tax rates using tax return data first we provide a theoretical framework showing under what assumptions this elasticity can be used as a sufficient statistic for efficiency and optimal tax analysis we discuss what other parameters should be estimated when the elasticity is not a sufficient statistic second we discuss conceptually the key issues that arise in the empirical estimation of the elasticity of taxable income using the example of the 1993 top individual income tax rate increase in the united states to illustrate those issues third we provide a critical discussion of selected empirical analyses of the elasticity of taxable income in light of the theoretical and empirical framework we laid out finally we discuss avenues for future research jel h24 h31 j22

the role of feed in tariff in the curtailment of wind power in china abstract while china s wind power initiative has experienced rapid growth serious curtailment issues persist though some studies have investigated this matter we explain this phenomenon from the novel perspective of excess capacity we first set up a theoretical model to explore the mechanism behind excess investment and find that the sticky feed in tariff fit and declining costs of wind power generate high mark up for wind power investors leading to a higher probability of excessive investment the theoretical prediction is empirically tested with a probit and tobit model using provincial level data between 2009 and 2016 the estimation results show that a 0 1 yuan increase in the mark up leads to a 2 3 increase in the rate of curtailed wind power based on the estimation results we simulate several scenarios to assess quantitatively how an improved policy design could have alleviated the curtailment issue simply increasing the frequency of the fit rate adjustment while maintaining the same subsidy reduction level between 2009 and 2016 could have reduced the curtailed wind power by 23 to 27 billion kwh accounting for 15 17 of actual curtailed wind power if the policy were better designed to reflect the declining trend of wind power costs more accurately the curtailment rates could have been further reduced by 2 81 corresponding to a reduction in wasted wind energy of 43 billion kwh or 28 of actual curtailment although accepting curtailment for a certain period could help to accelerate renewable energy deployment our analysis shows that the fit policy design could have been improved to reduce welfare loss these findings can not only assist the chinese government in framing effective policies but also may be applied to other emerging technologies or industries that require subsidy support

the effect of marginal tax rates on taxable income a panel study of the 1986 tax reform act this paper uses a treasury department panel of more than 4 000 taxpayers to estimate the sensitivity of taxable income to changes in tax rates on the basis of a comparison of the tax returns of the same individual taxpayers before and after the 1986 tax reform the analysis emphasizes that the response of taxable income involves much more than a change in the traditional measures of labor supply the evidence shows an elasticity of taxable income with respect to the marginal net of tax rate that is at least one and could be substantially higher the implications for recent tax rate changes are discussed

the sensitivity of an empirical model of married women s hours of work to economic and statistical assumptions this study undertakes a systematic analysis of several theoretic and statistical assumption s used in many empirical models of female labor supply using a singl e data set psid 1975 labor supply data the author is able to replic ate most of the range of estimated income and substitution effects fo und in previous studies in this field he undertakes extensive specif ication tests and finds that most of this range should be rejected du e to statistical and model misspecifications the two most important assumptions appear to be the tobit assumption used to control for sel f selection into the labor force and exogeneity assumptions on the wi fe s wage rate and her labor market experience copyright 1987 by the econometric society

which renewable energy policy is a venture capitalist s best friend empirical evidence from a survey of international cleantech investors governments around the world have adopted ambitious targets to increase the share of renewable energy and reduce greenhouse gas emissions they pursue a variety of policy approaches to achieve these targets it has been a popular theme for contributions in energy policy to investigate the effectiveness of such policies this article adds a new perspective to the debate namely looking at the policy preferences of private investors in innovative clean energy technology firms we surveyed 60 investment professionals from european and north american venture capital and private equity funds and asked them to assess the effectiveness of various policies in terms of stimulating their interest to invest in innovative clean energy technologies in addition to quantitative rankings we use qualitative interview data to capture additional information on why investors prefer some policies over others the combined analysis compensates for the inherent limitations of a quantitative ranking using generic policy types the results of this exploratory analysis demonstrate that all other things being equal investors in our sample perceived feed in tariffs to be the most effective renewable energy policy the overall preference for feed in tariffs is even more pronounced among investors based in europe and with higher exposure to clean energy

the effect of income taxes on household income research on the distribution of income during the 1980s has identified a trend towards increasing inequality which may be the continuation and acceleration of trends spanning several decades this paper explores to what extent behavioral responses to the tax changes during the 1980s may also explain the rising inequality the 1986 tax reform act is used as a natural experiment to explore the roles played by both taxes and a variety of nontax factors our principal finding is that both tax rates and nontax factors appear to have had significant effects on relative income growth during the late 1980s

the merit order effect a detailed analysis of the price effect of renewable electricity generation on spot market prices in germany the german feed in support of electricity generation from renewable energy sources has led to high growth rates of the supported technologies critics state that the costs for consumers are too high an important aspect to be considered in the discussion is the price effect created by renewable electricity generation this paper seeks to analyse the impact of privileged renewable electricity generation on the electricity market in germany the central aspect to be analysed is the impact of renewable electricity generation on spot market prices the results generated by an agent based simulation platform indicate that the financial volume of the price reduction is considerable in the short run this gives rise to a distributional effect which creates savings for the demand side by reducing generator profits in the case of the year 2006 the volume of the merit order effect exceeds the volume of the net support payments for renewable electricity generation which have to be paid by consumers

estimating life cycle labor supply tax effects we present an econometrically tractable life cycle labor supply model for panel data including intertemporally progressive taxes on uncertai wage and nonwge incomes our two stage fixedeffects generalized method of moments approach first extimates intretemporal and then intertemporal preferences specification testing domonstrates the value of incorporating joint progressive taxation of labor and nonlabor incomes results for prime age men emphasize the roles played by hourly wage endogeneity worker specific effects the measure of the rate of pay and intemporal budget constaint nonseparability simulations indicate that recent tax reform while not self financing stimulated made labor supplied by about 3 percent and reduced deadweight loss about 16 percent

the market value of variable renewables the effect of solar wind power variability on their relative price this paper provides a comprehensive discussion of the market value of variable renewable energy vre the inherent variability of wind speeds and solar radiation affects the price that vre generators receive on the market market value during windy and sunny times the additional electricity supply reduces the prices because the drop is larger with more installed capacity the market value of vre falls with higher penetration rate this study aims to develop a better understanding on how the market value with penetration and how policies and prices affect the market value quantitative evidence is derived from a review of published studies regression analysis of market data and the calibrated model of the european electricity market emma we find the value of wind power to fall from 110 of the average power price to 50 80 as wind penetration increases from zero to 30 of total electricity consumption for solar power similarly low value levels are reached already at 15 penetration hence competitive large scale renewable deployment will be more difficult to accomplish than as many anticipate

take a risk preferring prevention over control of biological invaders abstract scientists have argued that invasive species can be managed most cost effectively with greater investments in prevention further under ideas like the precautionary principle it is reasonable to expect that a cautious manager would use more prevention relative to control because it keeps more invaders out yet this is not typically done in many cases private and public resources are invested primarily to control existing invaders rather than to prevent new invasions managers frequently wait until after invaders have arrived and then scramble to limit the damages we believe these paradoxical decisions can be understood by recognizing the link between typical human preferences for risk bearing and the technology of risk reduction we demonstrate quantitatively how managers perceived to be cautious or averse to risk tend to shy away from prevention relative to control this counterintuitive result arises because control is a safer choice than prevention because its productivity is relatively less risky it works to remove existing invaders from the system in contrast the productivity of prevention is more uncertain because prevention only reduces the chance of invasion it does not eliminate it and invasion may not occur even in the absence of prevention managers averse to risk will inherently avoid as much uncertainty as possible whether the source of uncertainty regards ecological outcomes or economic productivity implications for environmental decision making are clear in invasive species management if managers act as though they are risk averse their caution can backfire when it leads to more control rather than prevention the social consequences of this choice are a greater probability of future invasions and lower social welfare our results suggest that social welfare is highest when managers were willing to take a risk with prevention

hourly wage rate and taxable labor income responsiveness to changes in marginal tax rates recently a voluminous literature estimating the taxable income elasticity has emerged as an important field in empirical public economics however to a large extent it is still unknown how the hourly wage rate an important component of taxable income reacts to changes in marginal tax rates in this study we use a rich panel data set and a sequence of tax reforms that took place in sweden during the 1980 s to estimate the elasticity of the hourly wage rate with respect to the net of tax rate while carefully accounting for the endogeneity of marginal tax rates as well as other factors that determine wage rates we do find a statistically significant response both among married men and married women the hourly wage rate elasticity with respect to the net of tax rate is estimated to 0 14 0 16 for males and 0 41 0 57 for females in addition we obtain uncompensated taxable labor income elasticities of around 0 21 for men and 0 96 1 44 for women in contrast to earlier studies we also find significant income effects for males accordingly for males the compensated taxable labor income elasticity is about 4 percentage points higher than the uncompensated one

experimental evidence on the relationship between tax evasion opportunities and labor supply abstract motivated by the observation that access to evasion opportunities is distributed heterogeneously across the labor market this paper examines the extent to which labor supply elasticities with respect to tax rates depend on such evasion opportunities we first discuss the channels through which access to evasion affects labor supply responses and then set up a laboratory experiment n 205 in which all participants undertake a real effort task over several rounds subjects face a tax rate that varies across rounds and are required to pay taxes on earned income the treatment group is given the opportunity to underreport income while the control group is not we find evidence that participants in the treatment group respond differently to changes in the net of tax rate than participants in the control group the effect is more prevalent when tax rates fall additionally the direction of the treatment effect is dependent on the evolution of tax rates across rounds

the impact of wind power support schemes on technology choices abstract in energy systems with large shares of variable renewable energies electricity generation is lower during unfavorable weather conditions system friendly wind turbines sfts rectify this by producing a larger share of their electricity at low wind speeds this paper analyzes to what extent sfts benefits out weigh their additional costs and how to incentivize investments into them using a wind power investment model for germany i show that sfts indeed deliver benefits for the energy system that over compensate for their cost premium floating market premium schemes incentivize their deployment only where investors bear significant price risks and possess sufficient foresight alternatively a new production value based benchmark triggers investors to install sfts that meet the requirements of power systems with increasing shares of variable renewable energies

the influence of spatial effects on wind power revenues under direct marketing rules abstract in many countries investments in renewable technologies have been accelerated by fixed feed in tariffs for electricity from renewable energy sources res while fixed tariffs accomplish this purpose they lack incentives to align the res production with price signals today the intermittency of most res increases the volatility of electricity prices and makes balancing supply and demand more complicated therefore support schemes for res have to be modified recently germany launched a scheme which gives wind power operators the monthly choice to either receive a fixed tariff or to risk a subsidized access to the wholesale electricity market this paper quantifies revenues of wind turbines under this new subsidy and analyzes whether when and where producers may profit we find that the position of the wind turbine within the country significantly influences revenues in terms of eur mwh the results are important for wind farm operators deciding whether electricity should be sold in the fixed feed in tariff or in the wholesale market however no location is persistently i e in every calendar month of the year above the average this limits the effect of the new subsidy scheme on investment locations and long term improvements in the aggregated wind feed in profile

the elasticity of taxable income during the 1990s new estimates and sensitivity analyses author affiliation seth h giertz sgiertz2 unl edu acknowledgment the author wishes to thank david weiner ed harris bob dennis doug hamilton tom woodward emmanuel saez chris bollinger and three anonymous referees for their comments and assistance 1 introductioneconomists have long recognized that taxation creates economic inefficiency by distorting relative prices often between leisure and all other goods in the economy even a broad based income tax can have substantial efficiency costs so long as leisure remains untaxed harberger 1964 uses this as motivation for comparing the efficiency implications of direct versus indirect taxation in so doing he shows how labor supply elasticities can be used to measure the efficiency implications of income taxation 1 harberger s analysis had a profound influence on public and labor economists spurring increased research into labor supply elasticities which were seen as proxies for the efficiency costs from taxation more than two decades after harberger economists began to emphasize the variety of other margins over which taxes can distort behavior in addition to hours worked these economists noted that these other behavioral responses may too have important implications for efficiency an important building block in the evolution of this literature was set forth by slemrod 1990 who presented a hierarchy of behavioral responses to taxation slemrod divided behavior into three categories based on their responsiveness to taxes his least responsive category real responses includes individuals changing consumption and work patterns and businesses altering investment and production decisions second in order of responsiveness is circumvention which includes both illegally evasion and legally avoidance bypassing the tax system 2 in the case of evasion income is concealed from tax authorities or factors that offset tax liabilities such as expenses and deductions are inflated beyond what is legally permitted in the case of avoidance income is shifted in order to receive more favorable tax treatment diverting income into a tax deferred retirement account is an example of avoidance 3 included in circumvention is the expenditure of time and money necessary to avoid or evade taxation third on the hierarchy and the most responsive is the timing of income receipt which includes pulling the receipt of income into the previous year or pushing it into the next in order to take advantage of more favorable tax treatment while not altering real behavior 4 slemrod further recognizes that the type of behavioral response could have implications for both tax revenue and tax incidence and in some cases efficiency predating slemrod s insights lindsey 1987 produced elasticity estimates for taxable income although what lindsey termed taxable income more closely approximates adjusted gross income agi instead of labor supply 5 lindsey s estimated elasticities were much larger than the labor supply literature would have suggested lindsey emphasized the revenue implications of the elasticity of taxable income eti but not its efficiency implications building on slemrod and lindsey feldstein 1995 produced eti estimates but went much further than lindsey in describing the behaviors that could affect taxable income he argued that many of these behaviors were not captured by labor supply elasticities furthermore feldstein posited that income taxation creates economic inefficiency not only by distorting the relative price between labor and leisure but more broadly by distorting the relative price between goods or activities that are taxed and those that are not taxed since leisure is not the only untaxed activity for example in response to taxes not only work hours but also work effort might change

the effect of income taxation on consumption and labor supply we estimate the incentive effects of income taxation in a life cycle model of consumption and labor supply without intratemporal strong separability we find that consumption and hours worked are direct complements in utility both increase with a compensated increase in the net wage the compensated net wage elasticity is about 0 3 nearly double estimates for u s men from a linear labor supply specification estimated intertemporal elasticities indicate significant intertemporal smoothing of utility the estimated marginal welfare cost of government revenue is 6 20 which is about half the estimated welfare cost when additivity between consumption and leisure is incorrectly imposed

estimating taxable income responses with elasticity heterogeneity abstract we explore elasticity heterogeneity in the estimation of the elasticity of taxable income eti and propose potentially valid instruments we show that previously used instruments are not valid and yield weighted averages of etis of different taxpayers plus a bias using the nber tax panel for 1979 1990 we find a weighted average eti of 0 57 when using all available variation in budget set changes provided by the tax reforms in the data our results also demonstrate that elasticity heterogeneity is an important explanation for the remarkable divergence of estimates in the previous literature

tax bases tax rates and the elasticity of reported income abstract tax reforms usually change both tax rates and tax bases using a panel of income tax returns spanning the two major u s tax reforms of the 1980s and a number of smaller tax law changes i find that the elasticity of income reported on personal income tax returns depends on the available deductions this highlights that this key behavioral elasticity is not an immutable parameter but rather that it can be to some extent controlled by policy makers one implication is that base broadening reduces the marginal efficiency cost of taxation the results are very similar for all income categories indicating that the rich are more responsive to tax rates because tax rules that apply to them are different their tax base is narrower the point estimates indicate that the tax reform act of 1986 reduced the marginal cost of collecting a dollar of tax revenue with roughly half of this reduction due to the base broadening and the other half due to the tax rate reduction as a by product the analysis in this paper offers a reconciliation of disparate estimates obtained by previous studies of the tax responsiveness of income

promoting the market and system integration of renewable energies through premium schemes a case study of the german market premium abstract with the share of renewable energies within the electricity sector rising improving their market and system integration is of increasing importance by offering plant operators a premium on top of the electricity market price premium schemes represent an option to increase the alignment of renewable electricity production with market signals and have been implemented by several eu member states this paper examines the case study of the german market premium scheme adopted in 2012 building on an evaluation of early experiences we discuss whether the market premium contributes to the aims of market and or system integration effectiveness and what potential efficiency gains and additional costs of administering integration are associated with it efficiency while exposing renewables to price risks is not the scheme s purpose it has successfully increased participation in direct marketing however risks of overcompensating producers for marketing and balancing costs are high and the benefits of gradually leading plant operators towards the market are questionable incentives for demand oriented production are established but they seem insufficient particularly in the case of intermittent renewable energy sources to conclude we provide an outlook on alternative designs of premium schemes and discuss whether they seem better suited for addressing the challenges ahead

recent trends in top income shares in the usa reconciling estimates from march cps and irs tax return data although the majority of research on us income inequality trends is based on public use march cps data a new wave of research using irs tax return data reports substantially higher levels of inequality and faster growing trends we show that these apparently inconsistent estimates are largely reconciled if the inequality measure and the income distribution are defined in the same way using internal cps data for 1967 2006 we closely match irs data based estimates of top income shares reported by piketty and saez 2003 our results imply that any inequality increases since 1993 are concentrated among the top 1 percent of the distribution

the elasticity of taxable income evidence and implications abstract a central tax policy parameter that has recently received much attention but about which there is substantial uncertainty is the overall elasticity of taxable income we provide new estimates of this elasticity which address identification problems with previous work by exploiting a long panel of tax returns to study a series of tax reforms throughout the 1980s this identification strategy also allows us to provide new evidence on both the income effects of tax changes on taxable income and on variation in the elasticity of taxable income by income group we find that the overall elasticity of taxable income is approximately 0 4 the elasticity of real income not including tax preferences is much lower we estimate small income effects of tax changes on reported income implying that the compensated and uncompensated elasticities of taxable income are very similar we estimate that this overall elasticity is primarily due to a very elastic response of taxable income for taxpayers who have incomes above 100 000 per year who have an elasticity of 0 57 while for those with incomes below 100 000 per year the elasticity is less than one third as large moreover high income taxpayers who itemize are particularly responsive to taxation our estimates suggest that optimal tax structures may feature tightly targeted transfers to lower income taxpayers and a flat or even declining marginal rate structure for middle and high income taxpayers

system friendly wind power how advanced wind turbine design can increase the economic value of electricity generated through wind power abstract previous studies find that the economic value of electricity usd mwh generated by wind power drops with increasing market share different measures can help mitigate the value drop including electricity storage flexible conventional plants expansion of transmission and demand response this study assesses another option a change in design of wind power plants advanced wind turbines that are higher and have a larger rotor compared to rated capacity lower specific rating generate electricity more constantly than classical turbines recent years have witnessed a significant shift towards such advanced technology our model based analysis for northwestern europe shows that such design can substantially increase the spot market value of generated electricity at a 30 penetration rate the value of 1 mwh of electricity generated from a fleet of advanced turbines is estimated to be 15 higher than the value of 1 mwh from classical turbines the additional value is large whether compared to wind generation costs to the value drop or to the effect of alternative measures such as electricity storage extensive sensitivity tests indicate that this finding is remarkably robust the increase in bulk power value is not the only advantage of advanced turbines additional benefits might accrue from reduced costs for power grids and balancing services to fully realize this potential power markets and support policies need to be appropriately designed and signal scarcity investors

welfare the earned income tax credit and the labor supply of single mothers during 1984 1996 welfare and tax policy were changed to encourage work by single mothers the earned income tax credit was expanded welfare benets were cut welfare time limits were added and welfare cases were terminated medicaid for the working poor was expanded as were training programs and child care during this same time period there were unprecedented increases in the employment and hours of single mothers we show that a large share of the increase in work by single mothers can be attributed to the eitc and other tax changes with smaller shares for welfare benet cuts welfare waivers training programs and child care programs