on measures of excess burden and their application abstract new measures of the additional excess burden of a tax reform are proposed and are shown to be useful in three key policy applications these new measures induce a unique measure of marginal excess burden meb among its interesting properties meb is uniformly zero for a proportional tax on inelastically supplied labor problems in applying the standard measures of total excess burden are demonstrated it is concluded that the induced measure of the marginal cost of funds mcf should be regarded as the most useful concept in applied tax analysis

efficiency and productivity of world health systems where does your country stand this article deals with estimating efficiency of world health systems using panel data on world health organization who member countries the stochastic frontier sf approach is used for this purpose we evaluate absolute efficiency as well as rankings and their sensitivity across alternative model specifications using both output maximizing and cost minimizing frameworks we also compare productivity of health service among countries derived from the output maximizing and cost minimizing models results show that efficiency rankings of countries vary substantially depending on whether the goal of healthcare provision is output maximization or health cost minimization the same applies to different sf model specifications

green taxes can we protect the environment and improve the tax system at the same time on a cursory inspection public economics appears to provide a straightforward and compelling answer of yes to the question posed in the title to this paper as economists have long argued appropriately designed taxes can in principle at least efficiently restrain levels of polluting activities and in addition such taxes will generate revenues so that we can reduce rates on other forms of taxation that distort the functioning of the economy green taxes in short promise a double dividend they can both reduce excessive levels of pollution and increase the efficiency of the overall tax system at least so several economists have argued recently 17 20 but is this really so with the growing recognition of the enormous revenue potential of certain environmental taxes especially carbon taxes to address the problem of global warming public economists have returned to this question with a new round of research efforts directed both to understanding the properties of pollution taxes as revenue sources and to estimating their revenue potential and the magnitude of their effects on the economy and the newly emerging literature is producing some quite astonishing and very troubling findings in this paper i want to review this work and explore its implications when viewed in relation to some other research it appears to suggest that most forms of regulatory activity at least those that increase the costs of the regulated activities may have hitherto unappreciated costs of a stunning magnitude what many of us would have taken to be second order side effects of environmental and other regulatory policies can be of a magnitude that compromises to a significant extent their welfare enhancing properties having reviewed this body of work i wish also to explore some issues in the political economy of green taxes it is helpful to begin by briefly putting the issue in historical perspective

efficiency heterogeneity and cost function analysis empirical evidence from pathology services in the national health service in england pathology services are increasingly recognized as key to effective healthcare delivery underpinning diagnosis long term disease management and research to the extent that pathology services affect a patient s treatment pathway significant healthcare costs are influenced directly by the performance of these services given pressures on the uk department of health to make efficiency savings and that little is known about the efficiency of pathology laboratories this area offers unlocked potential for efficiency gains we adopt a time varying inefficiency model with laboratory specific time paths for inefficiency to identify potential savings in pathology services based on a panel of 57 english laboratories over a 5 year period we apply a range of approaches to account for observable and unobservable heterogeneity between laboratories we find potential efficiency savings of 13 in pathology services in this sample which implies the potential for an annual saving of 390m in pathology across the nh

a neglected welfare cost of monopoly and most other product market distortions abstract a neglected effect of monopoly is the distortion in the quantity of resources supplied monopoly not only affects the economy s output mix it also results in factor prices that are below social marginal value products this latter distortion is shown to be quantitatively important when other policies such as taxes on labor earnings also depress factor prices under plausible conditions the welfare cost due to this distortion of monopoly is shown to be between five and fifteen times larger than the more familiar harberger triangle output mix distortion of monopoly it is suggested that the resource supply effects of many other policies are similarly likely to be more important than their commonly evaluated output market effects

some models for estimating technical and scale inefficiencies in data envelopment analysis in management contexts mathematical programming is usually used to evaluate a collection of possible alternative courses of action en route to selecting one which is best in this capacity mathematical programming serves as a planning aid to management data envelopment analysis reverses this role and employs mathematical programming to obtain ex post facto evaluations of the relative efficiency of management accomplishments however they may have been planned or executed mathematical programming is thereby extended for use as a tool for control and evaluation of past accomplishments as well as a tool to aid in planning future activities the ccr ratio form introduced by charnes cooper and rhodes as part of their data envelopment analysis approach comprehends both technical and scale inefficiencies via the optimal value of the ratio form as obtained directly from the data without requiring a priori specification of weights and or explicit delineation of assumed functional forms of relations between inputs and outputs a separation into technical and scale efficiencies is accomplished by the methods developed in this paper without altering the latter conditions for use of dea directly on observational data technical inefficiencies are identified with failures to achieve best possible output levels and or usage of excessive amounts of inputs methods for identifying and correcting the magnitudes of these inefficiencies as supplied in prior work are illustrated in the present paper a new separate variable is introduced which makes it possible to determine whether operations were conducted in regions of increasing constant or decreasing returns to scale in multiple input and multiple output situations the results are discussed and related not only to classical single output economics but also to more modern versions of economics which are identified with contestable market theories

oil prices and the rise and fall of the us real exchange rate abstract questions of the relative importance of real vs monetary shocks in explaining exchange rate movements still have no widely accepted answer despite their importance both for the research agenda and for policy questions we examine this issue using a variety of empirical techniques for the us effective exchange rate we find that a stable link exists between oil price shocks and the us real effective exchange rate over the post bretton woods period the results suggest that oil prices may have been the dominant source of persistent real exchange rate shocks and that energy prices may have important implications for future work on exchange rate behavior

are hospitals seasonally inefficient evidence from washington state efficiency measurement has been one of the most extensively explored areas of health services research over the past two decades despite this attention few studies have examined whether a provider s efficiency varies on a monthly quarterly or other sub annual basis this article presents an empirical study that looks for evidence of seasonal inefficiency using a quarterly panel of general acute care hospitals from washington state we find that hospital efficiency does vary over time however the nature of this dynamic inefficiency depends on the type of efficiency being measured our results suggest that technical and cost efficiency vary by quarter allocative and scale efficiency also vary on a quarterly basis but only if the data are jointly disaggregated by quarter and another firm specific factor such as size or operating status thus future research corporate decisions and government policies designed to improve the efficiency of hospital care need to account for seasonal trends in hospi

the nexus between oil price and russia s real exchange rate better paths via unconditional vs conditional analysis abstract instead of analyzing the causality between two time series unconditional analysis as it is usually done the present study deals with the nexus between oil price and russia s real exchange rate conditioning upon potential control variables at well specified horizons and on a frequency by frequency basis this research accounts also for the possible transient linkages and signal discontinuities a major finding of this paper is deeply suggestive of a sharp causality running from oil price to real exchange rate in lower frequencies this implies that russia should better tackle with turbulence triggered by oil price and continue to reduce its energy dependency via drastic and proactive measures the economic and fiscal initiatives of putin administration may help to cope with sudden shocks to lessen the great oil dependence and to build confidence needed for economic recovery while our research does not say much about the routes through which oil price may affect differently real exchange rate it clearly indicates the presence of short term relationship conditional to gdp government expenditures terms of trade and productivity differential the conditional analysis and signal detection appear as meaningful exercises to find new insights into the focal issue

crude oil prices and exchange rates causality variance decomposition and impulse response abstract this paper examines the short run and long run dynamic relationship between the u s imported crude oil prices and exchange rates the monthly data of the u s crude oil imports from five source countries during january 1996 and december 2009 are examined empirical results indicate that the exchange rates granger caused crude oil prices in the short run while the crude oil prices granger caused the exchange rates in the long run furthermore oil prices were affected by the exchange rate changes at a minimal level however in the medium run and the long run oil price shocks had a significant impact on exchange rate changes exchange rate shock has a significant negative impact on crude oil prices while the impulse response of the exchange rate variable to a crude oil price shock was statistically insignificant finally the impact of extreme price volatility in june 2008 on exchange rates was significant when world oil prices are stabilized currency fluctuations and uncertainty can be minimized

dynamics of oil price precious metal prices and exchange rate this study examines the co movements and information transmission among the spot prices of four precious metals gold silver platinum and palladium oil price and the us dollar euro exchange rate we find evidence of a weak long run equilibrium relationship but strong feedbacks in the short run the spot precious metal markets respond significantly but temporarily to a shock in any of the prices of the other metal prices and the exchange rate furthermore we discover some evidence of market overreactions in the palladium and platinum cases as well as in the exchange rate market in conclusion whether there are overreactions and re adjustments or not investors may diversify at least a portion of the risk away by investing in precious metals oil and the euro policy implications are provided

on the marginal welfare cost of taxation this paper develops a rigorous partial equilibrium analysis of the determinants of margin al welfare cost mwc of taxes on labor earnings it shows that four key parameters interact to determine the magnitude of mwc using aggregate data and plausible ranges of values for the parameters mwc can vary from under 10 percent to more than 300 percent of marginal tax revenue intermediate parameter values sugge st mwc is in the 25 50 percent range however the more extreme estimates cannot be ruled out on the basis of available evidence suggesting that mwc cannot yet be copyright 1987 by american economic association

nonlinear causality between crude oil price and exchange rate a comparative study of china and india while several studies have examined the linear causal relationship between oil prices and exchange rates little is known about the nonlinear causality between these two variables the present paper tries to fill this research gap in the context of india and china by applying the hiemstra and jones 1994 nonlinear granger causality test to the var residuals the study finds a significant bi directional nonlinear granger causality between oil prices and exchange rates in both countries the findings suggest that the nonlinearity of oil price influences the exchange rate irrespective of the exchange rate regimes further to check robustness the persistence in the variance of oil price and exchange rate is taken into account using a garch 1 1 model while the results consistently hold in the case of india with respect to china a unidirectional causality runs from exchange rate to oil price however the oil price in china does not granger cause exchange rate

measuring performance in primary care econometric analysis and dea we use data from the health service indicators database to compare different methods of measuring the performance of english family health services authorities fhsas in providing primary care a variety of regression and data envelopment analysis methods are compared as summary efficiency measures of individual fhsa performance the correlation of the rankings of fhsas across dea and regression methods across two years of data and across three different specifications of the technology of primary care are examined efficiency scores are highly correlated within variants of the two methods and across years for a given method inter method correlations are smaller and correlations across different specifications of the primary care production process are negligible and sometime negative

dynamic link between oil prices and exchange rates a non linear approach abstract we explore the non linear relationship between crude oil prices and exchange rates of major currencies from quantitative and structural perspectives by utilizing bivariate normal mixture model the correlation coefficients between oil prices and exchange rates demonstrate that their dependences typically start from 2004 then dynamically change over time then we investigate whether business cycle and oil price shocks as two possible exogenous factors affect the dependence structure of oil fx linkage we find significant structural heterogeneity during economic expansion while little evidence of heterogeneity in recession this finding provides alternative interpretations for the enhanced dependence between oil prices and exchange rates and generates implications of financialization in commodity market in terms of oil price shocks kilian 2009 the normal mixture model captures significant heterogeneity implying that unstable oil fx dependence structure is frequently associated with oil aggregate demand shocks and oil specific demand shocks with an emphasis on the dynamic weights of two underlying states we interestingly find that structural heterogeneities coincide with a variety of geopolitical and economic events the application of normal mixture not only provide us knowledge of non linear relationship between oil prices and exchange rates but also guidance for investors in risk management and portfolio diversification complementary to the traditional portfolio theory based on normal distribution

information technology efficiency and productivity evidence from korean local governments this study evaluates the performance of korean local government by measuring their technical efficiency te and total factor productivity tfp growth and more importantly examining the impact of information technology it on this performance the study is different from received analysis in that a unique measure of the state of it the informatization index is used to investigate the impact of it on both te and tfp growth empirical analyses are conducted on data from 222 korean local governments for the period 1999 to 2001 in particular data envelopment analysis techniques are applied to calculate te scores and tfp growth rates for sampled local governments the empirical findings confirm the positive impact it has in improving technical efficiency and accelerating productivity growth the estimated coefficients are correctly signed with other regional characteristics controlled for when te scores and tfp growth rates are regressed on the index in addition the findings indicate that economies o

measuring production efficiency of acute hospitals in scotland 1991 94 validity issues in data envelopment analysis data envelopment analysis is a potentially useful technique for measuring production efficiency and is being increasingly applied to health care services as with other areas however some fundamental concerns need to be addressed before data envelopment analysis can be accepted widely as a routine tool these include issues of validity and specification error this paper suggests a broad framework for assessing validity which should be developed further and gives illustrative examples of the problems in a real application within health care data from 75 scottish acute hospitals for three years from 1991 94 are analysed internal validity is assessed by examining the effect on the results obtained of the choice of inputs and outputs selected for analysis external validity is assessed by examining differences in the results obtained from the data for each of the three years in both cases it is concluded that there is a disturbing lack of concordance between the different results obtained caution mu

assessing school efficiency in portugal using fdh and bootstrapping this study explores a new data set that contains information both on inputs and outputs for a sample of portuguese secondary schools an fdh reference technology is used to determine radial technical efficiency scores and slacks although it is known that there is no reason to assume convexity in the study of education efficiency frontiers this is the first study ever to use fdh at the school level effectively relaxing the convexity assumption a two stage approach is used whereby the significant environmental variables that explain fdh efficiency scores and slacks are identified for the purpose of statistical inference the first application of the bootstrapping algorithms suggested by simar and wilson 2003 is conducted the study concludes that the unemployment rate access to health care services adult education and living infrastructures are determinants of school efficiency the differences between the coast and the interior of portugal seem to be more relevant as far as school efficiency is

commodity currencies and the real exchange rate abstract this paper examines whether the real exchange rates of commodity exporting countries and the real prices of their commodity exports move together over time using international monetary fund imf data on the world prices of 44 commodities and national commodity export shares we construct new monthly indices of national commodity export prices for 58 commodity exporting countries over 1980 2002 evidence of a long run relationship between national real exchange rate and real commodity prices is found for about one third of the commodity exporting countries the long run real exchange rate of these commodity currencies is not constant as would be implied by purchasing power parity based models but is time varying being dependent on movements in the real price of commodity exports

non parametric efficiency progress and regress measures for panel data methodological aspects this purely methodological paper deals with the role of time in non parametric efficiency analysis using both fdh and dea technologies it first shows how each observation in a panel can be characterized in efficiency terms vis a vis three different kinds of frontiers i contemporaneous ii sequential and iii intertemporal these are then compared with window analysis next frontier shifts outward and inward interpreted as progress or regress are considered for the two kinds of technologies and computational methods are described in detail for evaluating such shifts in either case these are also contrasted with what is measured by the malmquist productivity index finally an alternative way of identifying progress and regress independent of the frontier notion and referring instead to some benchmark notion is extended here to panel data

welfare state and life satisfaction evidence from public health care we examine the link between the welfare state and citizens subjective wellbeing by using evidence from public health care services by combining local level data on public health care and individual level data on life satisfaction we show that relatively high expenditures in health care have a positive effect on individuals life satisfaction in our data we find some evidence for an ends against the middle equilibrium in provision of public health care where middle income individuals prefer higher public expenditure than low income or high income individuals further our results indicate that the welfare benefit of public provision depends on individual political orientation

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

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

intergenerational mobility in britain in this paper we use longitudinal data on children and their parents to assess the extent of intergenerational mobility in britain based on data from the national child development survey a cohort of all individuals born in a week of march 1958 we find that the extent of intergenerational mobility is limited we report an intergenerational correlation of the order 40 to 60 for fathers and sons and 45 to 70 for fathers and daughters in terms of labour market earnings and years of schooling an examination of quartile transition matrices between parental and child earnings outcomes reveals a similar pattern finally it seems on the basis of these transition matrices that there is an important asymmetry in intergenerational earnings mobility with upward mobility from the bottom of the earnings distribution being more likely than downward mobility from the top

the non tax wedge abstract this paper argues that there are a large number of non tax phenomena that have the effect of reducing input prices below marginal value products just as do taxes on income it is shown that the presence of the non tax wedge between the marginal value product of labor and the net wage is highly significant for the analysis of the total and marginal welfare costs of taxes similarly the presence of the tax wedge is significant for the analysis of the welfare effects of the non tax phenomena welfare costs are substantially higher when appropriate account is taken of tax and non tax wedges that both distort supply decisions

funding transportation spending in metropolitan washington dc the costs of alternative revenue sources abstract this paper develops and implements an analytical framework for estimating the efficiency costs of raising additional revenue from taxes on labor property gasoline peak road use and higher transit fares for the washington dc area the model incorporates driving externalities and interactions between the different policies an economic case can be made for using congestion taxes and possibly gasoline and property taxes to raise extra revenue though it should be qualified for example the inelastic demand for driving limits the congestion benefits per dollar of revenue raised and these taxes have adverse employment effects in the same way that a tax on labor income does

prescribing costs in uk general practice the impact of hard budget constraints the development of an internal market in uk public sector health care has introduced hard budget constraints for those general practitioner purchasers who elect to hold their own budgets or funds prescription medicines constitute an element of the fundholder s budget and a theoretical model is developed to explain how hardening constraints might be expected to impact upon prescribing decisions the model is based on a trade off between prescribing and budget surplus and it predicts inter alia that both the prescribing costs and volume of medicines prescribed by fundholders will be lower than for non fundholders a reduction in x inefficiency is also predicted manifested as a higher rate of generic prescribing and the use of computerized prescribing management the model is found to be consistent with the observed facts in one english health authority lincolnshire

corporate real estate analysis evaluating telecom branch efficiency in greece this article proposes productivity analysis for evaluating the relative efficiency in corporate real estate usage across decision making units using data from the greek telecommunications organization gto we measure the productivity of 127 branches using the number of employees and the total area covered per building as inputs and the number of telephony access lines as outputs we apply three nonparametric data envelopment analysis dea models assuming constant returns to scale crs variable returns to scale vrs and slacks based measures sbm respectively we discuss how the proposed approach can provide real estate managers and analysts a multi informational tool that allows the quantification of targets and may serve as a guide tool for the efficient employment of real estate assets

the trade off between equality and efficiency this paper uses a 1976 microdata base to estimate the marginal cost of reducing income inequality with a policy that has distributional effects similar to the present tax transfer system the analysis uses a simulation methodology in which only the labor supply effects are evaluated other behavioral effects are ignored the most striking finding is that marginal cost is quite high even for modest labor supply elasticities for example in the benchmark case with a weighted average economy wide uncompensated wage elasticity of 0 2 and compensated elasticity of 0 31 the disposable money income of upper income quintiles of households is depressed by 9 51 for each dollar increase in the disposable money income of lower income quintiles when income equivalent values that take account of the value of leisure are compared the marginal cost for this case is estimated to be 3 49

revenue raising vs other approaches to environmental protection the critical significance of pre existing tax distortions using analytical and numerical general equilibrium models we show that preexisting factor taxes produce a tax interaction effect that increases the costs of pollution taxes and quotas under policies that raise revenue and recycle it through cuts in marginal factor tax rates this effect is partially offset by a revenue recycling effect grandfathered pollution quotas such as those used under the 1990 clean air act amendments to regulate electric utilities so2 emissions do not benefit from this offset preexisting taxes raise this regulation s cost by over 70 more than half of this additional cost could be avoided by auctioning quotas and exploiting the revenue recycling effect

revenue recycling and the welfare effects of road pricing the authors explore the interaction between taxes on work related traffic congestion and preexisting distortionary taxes in the labor market a congestion tax raises the overall costs of commuting to work and discourages labor force participation at the margin when revenues are returned in lump sum transfers the resulting efficiency loss in the labor market can be larger that the pigouvian efficiency gains from internalizing the congestion externality by contrast if congestion tax revenues are used to reduce labor taxes the net impact on the labor supply is positive and the efficiency gain in the labor market can raise the overall welfare gains of the congestion tax by as much as 100 percent recycling congestion tax revenues in public transit subsidies produces a positive but smaller impact on the labor supply in short the authors results indicate that the presence of preexisting tax distortions and the form of revenue recycling can crucially affect the size and possibly even the sign of the welfare effect of road pricing schemes the efficiency gains from recycling congestion tax revenues in other tax reductions can amount to several times the pigouvian welfare gains from congestion reduction