are higher education subsidies second best an optimal taxation framework is considered in which part of the population can take advantage of investment in higher education it is shown that social welfare can sometimes be increased by supplementing linear income taxes with a subsidy to material investment in higher education but that social welfare can never be increased by supplementing a nonlinear income tax with such a subsidy

international scientist mobility and the locus of knowledge and technology transfer abstract despite the growing interest of scholars and policymakers to better understand the determinants for researchers in public science to transfer knowledge and technology to firms little is known how temporary international mobility of scientists affects both their propensity to engage in knowledge and technology transfer ktt as well as the locus of such transfer based on a sample of more than 950 german academics from science and engineering faculties we investigate how the duration and the frequency of scientists visits at research institutions outside their home country affect ktt activities we find that most mobile scientists engage in ktt to firms both in the host and in their home country suggesting that ktt activities to firms abroad do not substitute or crowd out but complement ktt to firms in the home country we further find that the longer research visits abroad are the higher the likelihood that scientists engage in ktt to firms again both in the host and the home country however the more frequently scientists visit institutions abroad the more likely they are to engage in ktt to firms only in their home country our results therefore provide evidence for the benefits of brain circulation the article contributes to the growing strand of the literature on scientist mobility and on the determinants of industry science linkages at the individual level

de gustibus non est taxandum heterogeneity in preferences and optimal redistribution abstract the prominent but unproven intuition that preference heterogeneity reduces redistribution in a standard optimal tax model is shown to hold under the plausible condition that the distribution of preferences for consumption relative to leisure rises in terms of first order stochastic dominance with income given familiar functional form assumptions on utility and the distributions of ability and preferences a simple statistic for the effect of preference heterogeneity on marginal tax rates is derived numerical simulations and suggestive empirical evidence demonstrate the link between this potentially measurable statistic and the quantitative implications of preference heterogeneity for policy

distortionary taxes and the provision of public goods economists have long been concerned with finding an efficient level of public expenditure the classic statement of the problem was given by paul samuelson 1954 an optimal level of expenditure is where the sum of the marginal rates of substitution between the public good and a reference good equals the marginal rate of transformation between the public good and the reference good mrs mrt however samuelson s formula assumes that all of the revenue needed to finance public goods can be raised with lump sum taxes since this is not generally possible the formula must be modified to account for the distortionary effects of the tax system an appropriate modification is to multiply the cost side of the equation by a term that is commonly called the marginal cost of public funds mcf in the case of samuelson s formula where government is entirely financed with lump sum taxes the mcf would be exactly 1 0 in the traditional view of economists distortionary taxes cause the mcf to be greater than one thus raising the cost of providing public goods in this paper we discuss some cases where the mcf may be less than one we will illustrate this possibility using numerical examples for labor taxes

what makes basic research economically useful abstract economic analysis has helped us understand the strong economic dimension in the explosive growth of science and more recently the reasons for continuing public subsidies however the growing domination of the market failure approach has led to the analytical neglect of two major questions for policy makers how does science contribute to technology are the technological benefits from science increasingly becoming international on the former too much attention has been devoted to the relatively narrow range of scientific fields producing knowledge with direct technological applications and too little to the much broader range of fields the skills of which contribute to most technologies on the latter national systems of science and of technology remain closely coupled in most major countries in spite of the technological activities of large multinational firms empirical research is needed on concentration scale and efficiency in the performance of basic research where techniques and insights from the applied economics of industrial r d are of considerable relevance there is no convincing evidence so far of unexploited economies of scale in basic research this evidence shows that many policies for greater selectivity and concentration in basic research have been misconceived economists and other social scientists could help by formulating more persuasive justifications for public subsidy for basic research and by making more realistic assumptions about the nature of science and technology

progressive taxation and the social marginal cost of public funds abstract this paper describes the calculation of the social marginal cost of public funds smcf for a progressive tax system which distorts individuals labour supply decisions a formula for the smcf indicates that the income and substitution effects of the labour supply response are weighted by the changes in individuals average and marginal tax rates respectively other well known formulas for the smcf are shown to be special cases of this formula the difference between this formula and the mayshar 1991 formula is shown to be due to different but equally valid ways of computing the change in the average tax rate the condition under which a marginal tax rate increase may lead to a reduction in revenues is derived

public versus private investment in human capital endogenous growth and income inequality in this paper we present an overlapping generations model with heterogeneous agents in which human capital investment through formal schooling is the engine of growth we use simple functional forms for preferences technologies and income distribution to highlight the distinction between economies with public education and those with private education we find that income inequality declines more quickly under public education on the other hand private education yields greater per capita incomes unless the initial income inequality is sufficiently high we also find that societies will choose public education if a majority of agents have incomes below average

portfolio analysis with factors and scenarios recently there has been a growing interest in the scenario model of covariance as an alternative to the one factor or many factor models we show how the covariance matrix resulting from the scenario model can easily be made diagonal by adding new variables linearly related to the amounts invested note the meanings of these new variables note how portfolio variance divides itself into within scenario and between scenario variances and extend the results to models in which scenarios and factors both appear where factor distributions and effects may or may not be scenario sensitive

policy orientation effects on performance with licensing to start ups and small companies abstract this study empirically tests a model of a university s selectivity and support policy orientation for technology licensing and its interaction with the external environment for entrepreneurship using a sample of 134 us research universities we investigate main two way and three way interaction effects for two measures of technology transfer performance licenses with companies that subsequently go public and product royalties results indicate both main and moderating effects for both measures of performance implications for practice and policy are offered with special attention to public universities

a fuzzy goal programming approach to portfolio selection abstract portfolio selection is a usual multiobjective problem this paper will try to deal with the optimum portfolio for a private investor taking into account three criteria return risk and liquidity these objectives in general are not crisp from the point of view of the investor so we will deal with them in fuzzy terms the problem formulation is a goal programming g p one where the goals and the constraints are fuzzy we will apply a fuzzy g p approach to the above problem to obtain a solution then we will offer the investor help in handling the results

the family and the state the immaturity of children sometimes precludes efficient arrangements between children and parents or others responsible for child care the difficulty in establishing efficient relations within families provides the point of departure for our interpretation of the heavy state involvement in the family the authors believe that a surprising number of state interventions mimic the agreements that would occur if children were capable of arranging for their care many regulations of the family improve the efficiency of family activities these interventions include subsidies to education and training social security and other old age support subsidies to births laws that limit access to divorce and the sale of children and laws that require parents permission for early marriage and other choices of children families that leave bequests can force children to repay parents for investments in human capital by reducing bequests therefore these families do not underinvest in childrens human capital by contrast families that do not leave bequests often poorer families do underinvest in children the state may subsidize schools and other training facilities to raise investments in children by poorer families to efficient levels authors modified

self enforcing intergenerational transfers and the provision of education this paper considers intra family financing of human capital under the assumptions that individuals are selfish and binding contracts are not feasible cooperation among family members is possible through a family norm a family social capital which prescribes the obligations to be met at each stage in life and sanctions for those who deviate we characterize the set of self enforcing transfers and show that there is a downward bias in the family provision of education this gives a rationale for public action as a remedy to the lack of commitment between selfish family members

on the optimal income taxation and educational decisions abstract in this paper we consider three different ways of incorporating individuals educational choices into the design of optimal income tax policy in one variant of the model case 2 where an individual chooses his education before knowing his ability and after that education makes his labour supply decisions on the basis of known ability it is shown that qualitative features of the optimal income tax schedule are not similar to those of the standard optimal income tax model the marginal tax rate is generally not zero at the endpoints of distribution but is most likely negative using numerical methods some interesting features quite different from earlier numerical results are revealed especially in the second case for example the marginal tax rate is non decreasing in income for a substantial income range in addition our calculations support neither the traditional views on the egalitarian nature of equal education nor its disadvantageous consequences in the perfect utilitarian society

the marginal welfare cost of public funds theory and estimates abstract we derive a general analytic formula for the marginal welfare cost mwc of public funds without imposing restrictive assumptions on preferences or technologies the framework encompasses the various special cases previously considered and reconciles the disparities among the reported estimates of mwc unresolved differences in existing estimates are fully explained by appropriate interpretations of intended thought experiments and alternative assumptions about the elasticity of labor supply with respect to public spending further progress in measuring mwc requires empirical estimation of labor supply functions that include government spending as an explanatory variable

the limits of capital transcending the public financer private producer split in industrial r d abstract a near consensus has emerged supporting the public funding of industrial r d as a solution to a host of market failures however the common policy prescription urges government to go no further than minimal market enhancing intervention largely keeping the state to the role of financer of privately conducted r d by focusing on three general issues in the context of industrial r d trust coordination and motivation this article develops an argument for a more expansive government role two models of state intervention are at the center of the analysis public production of r d and state sponsorship of inter firm and inter organizational networks it is argued that both these models have distinct advantages as well as weaknesses in addressing common challenges to industrial r d production informed by the positive experiences of different states that have moved in recent years from high technology industries periphery to the center this article explains how the two models of state intervention address the various problems associated with pure private production it is concluded that while even advanced countries with well developed markets might find it advantageous to actively intervene in industrial r d the two models should especially be considered in cases of economies that suffer from weak market signals low retention of value added functions limited professional capacities and limited institutional thickness and networks

impacts of grants and contracts on academic researchers interactions with industry abstract based on a representative national sample of 1564 academic researchers we investigate the impacts of research grants and contracts on the nature and extent of faculty research and technology activities with industry a particular focus is on understanding the independent contributions of industry and government grant sources on levels of industrial involvement in addition to examining the source of grants the study controls for a number of independent factors including scientific field research center affiliation tenure status and gender results suggest independent effects of grants and contracts on industrial activities grants and contracts from industry have a significant effect on academic researchers propensity to work with industry as measured by an industrial involvement scale federally sponsored grants also have an impact in increasing work with industry but a more moderate one further those with more grants and contracts of each type have a greater propensity for industrial involvement than those who have such contracts but fewer this holds even when proxies for productivity and career stage are introduced in regression equations the analysis also considers whether provision of grants and contracts is best viewed as a predictor of industrial involvement or just another type of industrial involvement using factor analysis and nested multivariate modeling to compare effects

power in firm networks what it means for regional innovation systems christopherson s clark j 2007 power in firm networks what it means for regional innovation systems regional studies 41 1223 1236 the role of power within regional firm networks is noted in empirical studies but insufficiently theorized it is suggested that network functioning is conflictual and that more powerful network members particularly transnational corporations tncs leverage regional resources to advance their sustainable competitive advantage the agendas and power exercised by tncs within regionalized firm networks have significant implications for regional policy and the uneven allocation of resources and capacities within and among regions the findings indicate that transnational firm access to resources that are critical to innovation including university research and skilled labour negatively affects the potential for innovation by small and medium size firms christopherson s et clark j 2007 le pouvoir au sein des reseaux d entreprise son importance pour les systemes d

international technology transfer in services this study examines the nature of technology and the process of its transfer in five service industries from parent companies to foreign affiliates three principal research questions are posed what is the key technology in each industry what are the main methods for transferring this technology how and why do technology and transfer methods differ across firms industries and countries the empirical analysis shows that key technologies were generally knowledge of experience in the industry and methodology for producing the service transfer of the technology was mainly done through the training and transfer of experts and organizational forms were wholly owned subsidiaries and international partnerships more technology transfer occurred when firms were more international when affiliates were more recently established and when parent ownership was lower in the affiliate some evidence exists that more firm specific jointly produced technology leads to higher ownership percentage and greater transfer to affiliates

educational policy and the economics of the family this paper analyzes the implications of alternative ways to model decision making by families for educational policy we show that many of the policy implications associated with credit constraints cannot be distinguished from the implications of models of the family that differ from the conventional barro becker model we then argue that it is the combination of credit constraints and non conventional preferences that provides a robust basis for government intervention to promote educational investment

how optimal nonlinear income taxes change when the distribution of the population changes abstract the impacts of changing the number of individuals of a particular skill level on the solutions to two versions of the finite population optimal nonlinear income tax problem are investigated in one version preferences are quasilinear in leisure for this version it is shown that it is possible to sign the directions of change in everyone s optimal consumptions and optimal marginal tax rates in the other version preferences are quasilinear in consumption for this version it is shown that it is possible to sign the directions of change in everyone s optimal before tax incomes and optimal marginal tax rates moreover the directions of change in the optimal marginal tax rates are the same for the two specifications of preferences

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

utilities privatization and the poor lessons and evidence from latin america abstract the perception that privatization hurts the poor is growing and creating a backlash against the private provision of basic infrastructure services at the same time governments are finding themselves fiscally strapped searching for ways to finance the large investments needed to expand services to the poor in latin america a laboratory for privatization evidence exists which sheds light on the privatization experience this paper analyzes the channels through which the poor might either lose or gain from privatization examines the evidence accumulated on what has actually happened and then discusses the policy options available to decision makers who want to increase efficiency while at the same time dealing with the infrastructure needs of the poor that have been identified as being important for their welfare in that context the issue of whether welfare considerations should form part of the regulatory approach to privatized services is examined the paper s major aims are to shed light on the issue of who can and does benefit from privatization of utilities and to guide policy makers in the choices

socially excessive dissemination of patent licences compared with the social optimum a monopolist usually sells too little this result seemingly includes the case of a lab that licences its patented cost innovation katz and shapiro 1986 find conditions under which the lab will issue fewer than the socially optimal number of licences however i find instead that its incentives can be socially too high the monopoly seller may sell too much for example it can be profit maximizing to sell several licences while it is socially optimal that none is sold en comparaison avec l optimum social un monopoleur habituellement vend trop peu voila qui semble tenir pour le cas d un laboratoire qui vend des licences pour une innovation brevetee qui reduit les couts katz shapiro 1986 ont montre dans quelles conditions le laboratoire va emettre moins que le nombre optimal de licences cependant l auteur decouvre que les incitations peuvent plutot l amener a en emettre trop plus que l optimum social par exemple il se peut que la maximisation du profit amene a vendre plusieurs licences alors qu il serait socialement optimal de n en vendre aucune

multidimensional incentive compatibility and mechanism design abstract incentive compatibility conditions are characterized in general for problems in which several goods are to be allocated and agents types are multidimensional two questions of monopoly pricing under multidimensional uncertainty are then analyzed first we find the optimal nonlinear pricing scheme when the monopolist knows only the distribution of an arbitrarily parameterized family of demand curves and second we solve for the optimal bundling policy for a multiproduct monopolist

the drivers of efficient knowledge transfer performance evidence from british universities using data from the united kingdom this study explores the institutional and environmental factors that influence universities efficiency in knowledge transfer while studies of universities knowledge transfer performance have so far focused on patent commercialisation and research contracting with industry it is increasingly acknowledged that universities engage in a broader range of knowledge transfer activities including consulting public engagement and provision of knowledge intensive services when these are taken into account less research intensive universities and those with a greater share of staff in the arts and humanities improve their relative efficiency more specialised older and larger institutions are more efficient performers while research intensity is no longer a strong predictor of efficiency

self selection and pareto efficient taxation abstract this paper analyses the set of pareto efficient tax structures the formulation of the problem as one of self selection not only shows more clearly the similarity between this problem and a number of other problems such as the optimal pricing of a monopolist which have recently been the subject of extensive research but also allows the derivation of a number of new results we establish i under fairly weak conditions randomization of tax structures is desirable ii if different individuals are not perfect substitutes for one another in production then the general equilibrium effects until now largely ignored in the literature of changes in the tax structure may be dominant in determining the optimal tax structure in particular if the relative wage of high ability and low ability individuals depends on the relative supplies of labor the optimal tax structure entails a negative marginal tax rate on the high ability individuals and a positive marginal tax rate on the low ability individuals the marnitude of which depends on the elasticity of substitution iii if individuals differ in their preferences pareto efficient taxation may entail negative marginal tax rates for high incomes while iv if wage income is stochastic the marginal tax rate at the upper end may be 100 our analysis thus makes clear that the main qualitative properties of the optimal tax structure to which earlier studies called attention are not robust to these attempts to make the theory more realistic

is everything neutral in his well known analysis of the national debt robert barro introduced the notion of a dynastic family this notion has since become a standard research tool particularly in the areas of public finance and macroeconomics in this paper we critique the assumptions on which the dynastic model is predicated and argue that this framework is not a suitable abstraction in contexts in which the objective is to analyze the effects of public policies we reach this conclusion by formally considering a world in which each generation consists of a large number of distinct individuals as opposed to one representative individual we point out that family linkages form complex networks in which each individual may belong to many dynastic groupings the resulting proliferation of linkages between families gives rise to a host of neutrality results including the irrelevance of all public redistributions distortionary taxes and prices since these results are not at all descriptive of the real world we conclude

viewpoint innovations in the theory and practice of redistribution policy we present a survey of key results from second best optimal redistribution theory and their implications for tax transfer policy the core results include the corlett hague theorem the deaton conditions the production efficiency theorem the atkinson stiglitz theorem and the mirrlees saez characterization of the optimal non linear income tax system these have been augmented in recent years by optimal participation tax rates the implications of involuntary unemployment the use of unconventional instruments such as minimum wages in kind transfer and workfare and the optimal taxation of capital income and bequests l auteur presente un survol des principaux resultats theoriques de la redistribution optimale de second ordre et de leurs implications pour les politiques d imposition et de transferts les resultats fondamentaux incluent le theoreme de corlett hague les conditions de deaton les theoremes d efficacite en production le theoreme d atkinson stiglitz ainsi que la caracterisation du systeme optimal d imposition non lineaire du revenu a la mirrlees saez ces derniers resultats ont ete enrichis au cours des dernieres annees par certains autres portant sur les taux d imposition decoulant des allocations conditionnelles les implications du chomage involontaire l usage d instruments non conventionnels tels que le salaire minimum les transferts en nature le workfare ainsi que l imposition optimale des revenus du capital et des legs ces resultats sont exposes et leurs implications pour les politiques d imposition et de transferts sont discutees

mapping the university technology transfer process abstract transfer of technologies from the universities to the private sector is increasingly regarded as playing a significant role in new business starts growth of existing businesses and new job creation further there are monerous models describing the process of technology transfer some of the existing models represent this process as a linear progression of steps from idea generation and technology development at the university to patenting the technology and then establishing a university private firm link through a formal search process the process culminates in patent rights transfer other models describe technology transfer in terms of networking arrangements and emphasize not so much formal search as the role of long term relationships between the two parties still other studies indicate that it is possible to combine the two approaches formal search and informal networking arrangements to ensure successful transfer business firms involved in transfer also may be classified into several groups transfer could occur between the university and an established firm between the university and a recently created new venture or transfer could result in the creation of a new company technology for example could be transferred to a large company that uses the transferred technology as a basis for just one of many product lines or to a small firm that makes the transferred technology a cornerstone of its product strategy are there any differences among the transfer processes used when large or small firms are involved or when technology is transferred to an existing company or results in the creation of a new firm to address these questions we mapped the technology transfer processes of 23 different technologies developed at the university of minnesota from 1983 to 1993 more than half of the technologies studied went to large companies and were used either to upgrade existing products or to extend existing product lines in eight cases technologies were transferred to small firms in three cases technologies were transferred to venture capital firms or intermediaries and had not been commercialized at the time the study was completed in the rest of the cases new firms were created by the inventors university scientists themselves and served as vehicles for marketing their inventions none of the firms of the latter group have grown beyond a part time employment opportunity for the inventors and only one firm provided evidence that additional hiring would be necessary in the near future only four cases involved transfers of technologies that have been developed and patented by the university to firms that did not have any relationships with the university prior to the transfer in these four cases the firms used some form of search strategy to find a needed technology however there is no evidence that any of the firms had a well developed formal search procedure in the overwhelming majority of cases some form of relationship existed between the university or individual inventors and the private firm prior to the transfer these relationships ranged from long term friendships and or cooperation to such less involved forms as interaction at research seminars and university sponsored events further in four cases the technologies were initially developed by private companies whereas the university s role was to assist in refinement or testing of the technology the research yielded a number of additional findings that deserve further investigation and discussion specifically the study did not provide any evidence that the successfully completed technology transfers made any substantial contribution to either new business creation or the generation of new jobs this finding suggests that scholars and policy makers should proceed with caution before accepting a notion that new or high technology firms will have any direct economic impact the study findings hold specific implications for entrepreneurial behavior and public policy the formal search and shopping for a technology model suggests that both business and academic government laboratories publicize respectively their requirements and offerings and that opportunities for creative brokerage ought to exist we found that in the majority of cases technology was transferred not through formal search but through some prior relationships among individuals this observation suggests that the ability to build extended networks of relationships not only within the business world but also with the university community is an important skill that owners and managers of the technology based businesses need to possess entrepreneurs seeking to start businesses based on new technologies may need to reevaluate how much of their limited time to allocate to build and maintain networks and cooperative relationships and how much time to shop for new technologies through formal channels further public policy and the efforts of the university transfer agencies intended to facilitate transfer may need to shift their emphasis from facilitating shopping by organizing and or paying for publicity which is currently the major emphasis to providing assistance in network building and relationship marketing efforts

the evolving state of the art in technology transfer research revisiting the contingent effectiveness model the purpose of our study is to review and synthesize the rapidly evolving literature on technology transfer effectiveness our paper provides a lens into relatively recent work focusing particularly on empirical studies of us technology transfer conducted within the last 15 years in doing so we update and extend the contingent effectiveness model of technology transfer developed by bozeman 2000 specifically we include the growing interest in social and public value oriented technology transfer and thus the contingent effectiveness model is expanded to consider this literature we categorize studies according their approaches to measuring effectiveness draw conclusions regarding the current state of technology transfer evaluation and offer recommendations for future studies

redistribution and the marginal cost of public funds abstract discussions of the marginal cost of public funds with distortionary taxation are often cast in the framework of a one consumer economy while the main justification of distortionary taxes is that they are needed for redistribution this paper analyzes the issue in a model with heterogeneous consumers and a linear income tax focusing on the tradeoff between labour market distortions and the redistribution from high wage to low wage workers in an optimal tax system the mcf will be the same for all sources of funds and under certain assumptions less than one without optimality the mcf will in general differ between different sources of finance

political economy and the social marginal cost of public funds the case of the meltzer richard economy i introduction the marginal cost of public funds mcf is defined as the full cost to the private sector of raising an additional dollar of tax revenue including deadweight loss or excess burden of taxation imposed on taxpayers much of the theoretical literature on the mcf is cast in the framework of a one consumer economy however the main reason why we have distortionary taxes in the first place is precisely because of the need for redistribution or the existence of consumers with heterogeneity in view of this inconsistency several papers including dahlby 1998 and sandmo 1998 have recently started addressing the so called social marginal cost of public funds smcf in models with heterogenous consumers 1 these papers highlight how the redistributive concern may alter the calculation of the smcf 2 in previous studies on the mcf or smcf the existing of status quo tax system has been assumed to be either arbitrary or optimal 3 it is arguable however that the existing tax system is neither arbitrary nor optimal but rather represents a political equilibrium the approach adopted by hettich and winer 1999 and persson and tabellini 2000 corroborates this argument in surveying the political economy of public finance the authors of these two books explicitly portrayed public policy as the equilibrium outcome of some specified political process in this note we study the smcf issue on the basis of the plausible premise that the existing tax system itself represents a political equilibrium the calculation of the smcf is basically a normative exercise the premise that the existing tax system is a policy outcome in political equilibrium will enable us to exploit the positive property of political equilibrium in this normative exercise as an illustration of our approach we revisit the political economy of redistributive taxation as set out in meltzer and richard 1981 hereafter m r the m r model holds a prominent position in the redistribution literature and has been elaborated and extended in many directions persson and tabellini 2000 part ii 4 section ii overviews the m r model sections iii and iv derive and discuss the smcf in the m r economy an interesting feature of our finding is that the degree of income inequality as measured by the ratio of mean to median income can play an important role in estimating the smcf and judging whether the level of redistribution is excessive or inadequate ii the m r model a economy consideran economy in which there are n 1 u sup i u c sup i l sup i i 1 n this utility function is assumed to be smooth and possess the usual properties the income tax system consists of two parameters a marginal tax rate t and a lump sum grant a the tax system pays the lump sum grant or demogrant a to each individual and finances the payment by imposing the marginal tax rate t on all earned income 5 the budget constraint facing individual i is 2 c sup i 1 t w sup i l sup i a i 1 n where l sup i denotes the labor supply with l sup i l sup i 1 from equations 1 and 2 we can derive the indirect utility function 3 v sup i v 1 t w sup i a u 1 t w sup i l sup i a 1 l sup i i 1 n it is assumed that the government budget is balanced denoting per capita pretax income by y we then have 4 ty a where y summation y sup i n with y sup i w sup i l sup i b political economy the preferences of individuals qua voters over income tax policy are represented by the indirect utility function 3

portfolio optimization with factors scenarios and realistic short positions this paper presents fast algorithms for calculating mean variance efficient frontiers when the investor can sell securities short as well as buy long and when a factor and or scenario model of covariance is assumed currently fast algorithms for factor scenario or mixed factor and scenario models exist but except for a special case of the results reported here apply only to portfolios of long positions factor and scenario models are used widely in applied portfolio analysis and short sales have been used increasingly as part of large institutional portfolios generally the critical line algorithm cla traces out mean variance efficient sets when the investor s choice is subject to any system of linear equality or inequality constraints versions of cla that take advantage of factor and or scenario models of covariance gain speed by greatly simplifying the equations for segments of the efficient set these same algorithms can be used unchanged for the long short portfolio selection problem provided a certain condition on the constraint set holds this condition usually holds in practice

can eliminating school fees in poor districts boost enrollment evidence from south africa abstractthe charging of school user fees is a much debated policy issue in developing countries in this paper i evaluate the impact of a south african fee elimination program that was targeted at the poorest two quintiles of schools based on a community poverty score fixed effects estimates find that the program increased enrollment by almost 2 percentage points in treated secondary schools an increase concentrated in earlier secondary grades there is substantial heterogeneity in the estimated secondary school effect it is driven entirely by an increase of around 3 5 percentage points in the poorer of the two treated quintiles regression discontinuity estimates confirm that the relatively wealthy schools near the treatment cutoff did not experience any effects on enrollment overall the abolition of fees seems to have been reasonably effective in increasing secondary school enrollment in particularly poor communities this is despite the fact that the eliminated fees were relatively low comprisin

a technological communications costs model of r d consortia as public policy abstract for complex technologies the process of innovation and diffusion often requires close cooperation among people for learning what one another know the social and political context of those links among researchers is an important determinant of their efficiency where there are social and political barriers to those links free market structures are not well suited to minimizing the costs of the communication of technological information the paper develops a technological communications costs market failure model of r d results as impure public goods it shows how the design of the european r d consortia promoting public policies esprit and eureka helps firms overcome the market failures described by the model the analysis expands the traditional market failure justifications for a government role in industrial r d governments can play a positive economic role by helping firms overcome social and political barriers to negotiations and technological communications yet market failure arguments are not alone sufficient for policymaking so the paper considers the esprit and eureka policy designs in a political context as model policy tools for organizing public support for industrial r d

investment in education and the time inconsistency of redistributive tax policy time inconsistency of tax policy is shown to arise in a setting where households differ in their ability to accumulate wealth and where the government has redistributional objectives it is assumed that wealth accumulation takes the form of human capital acquired through education the government is precluded from redistributing to a first best optimum by a self selection constraint the second best is shown to be time inconsistent in the time consistent optimum households underinvest in education an argument can be made for public intervention in the provision of education

university start up formation and technology licensing with firms that go public a resource based view of academic entrepreneurship abstract although academic entrepreneurship is a topic receiving some attention in the literature higher education s appetite for expanding technology transfer activities suggests that more research is needed to inform practice this study investigates the effects of particular resource sets on two university commercialization activities the number of start up companies formed and the number of initial public offering ipo firms to which a university had previously licensed a technology utilizing multisource data on 120 universities and a resource based view of the firm framework a set of university financial human capital and organizational resources were found to be significant predictors of one or both outcomes

reviving manufacturing with a federal cogeneration policy abstract improving the energy economics of manufacturing is essential to revitalizing the industrial base of advanced economies this paper evaluates ex ante a federal policy option aimed at promoting industrial cogeneration the production of heat and electricity in a single energy efficient process detailed analysis using the national energy modeling system nems and spreadsheet calculations suggest that industrial cogeneration could meet 18 of u s electricity requirements by 2035 compared with its current 8 9 market share substituting less efficient utility scale power plants with cogeneration systems would produce numerous economic and environmental benefits but would also create an assortment of losers and winners multiple perspectives to benefit cost analysis are therefore valuable our results indicate that the federal cogeneration policy would be highly favorable to manufacturers and the public sector cutting energy bills generating billions of dollars in electricity sales making producers more competitive and reducing pollution most traditional utilities on the other hand would lose revenues unless their rate recovery procedures are adjusted to prevent the loss of profits due to customer owned generation and the erosion of utility sales from a public policy perspective deadweight losses would be introduced by market distorting federal incentives ranging annually from 30 to 150 million but these losses are much smaller than the estimated net social benefits of the federal cogeneration policy

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

faculty support for the objectives of university industry relations versus degree of r d cooperation the importance of regional absorptive capacity abstract the growing importance of regions in the analysis of innovation and the pressure on european universities to interact with their environment justify this article it argues that faculty support for the objectives of university industry relations uir does not vary across disciplines and does not respond to university encouragement in a region with low absorptive capacity these results are in contrast with those obtained in studies of technology leading countries like the usa furthermore incentives for uir may generate unpredicted dynamics while instruments to cooperate are not significant finally support for the objectives of uir should not be confused with the degree of r d cooperation the former is sensitive to university age while the latter is sensitive to gender discipline commitment to r d and university encouragement empirical evidence is obtained from a sample of faculty from the valencian community spain and analysed through a set of models for discrete choice

knowledge interactions between universities and industry in austria sectoral patterns and determinants the relationship between university and industry is a complex and heterogeneous phenomenon and an important topic of the recent debate on innovation systems this chapter explores the role of knowledge flows between universities and firms in the austrian national innovation system and provides valuable insights into several dimensions of knowledge flows that are not typically explored in research on this topic the patterns of interaction between 46 different fields of science and 49 economic sectors represent an important and interesting outcome of the analysis left censored tobit models are used to evaluate the effect of sector specific and science field specific characteristics upon the probability of knowledge interaction disaggregated by type of interaction

a marginal cost of funds approach to multi period public project evaluation implications for the social discount rate abstract although the use of marginal cost of funds mcf has been widely appreciated in public finance literature discussions of mcf have been confined to a static setting this paper develops a multi period project evaluation rule that is based on mcf unlike previous approaches the parameters required for implementing the mcf rule are independent of projects under consideration a lesson from this paper is that the government discount rate policies that are largely based on the concepts of social discount rate and shadow price of capital should be rewritten with the use of parameters representing mcf

optimal public good provision with limited lump sum taxation it is often argued that the use of distortionary taxation lowers the optimal provision of public goods below its optimal level in a first best economy which contains no restrictions on lump sum taxation however this issue is usually investigated using commodity tax models that contain no lump sum taxes this paper examines a many consumer economy in which the only tax instruments are commodity taxes and a poll tax subsidies are negative taxes the optimal level of public good provision in this economy typically exceeds the first best level at least for distributionally neutral public goods copyright 1991 by american economic association

how large is the swedish academic sector really a critical analysis of the use of science and technology indicators sweden is perceived to be top ranking and a role model in terms of its volume of academic r d this perception is based on analyses using two standard indicators we assess the validity of these and argue that institutional features skew the result in favour of a high ranking swedish academic r d is more appropriately characterised as average or below average in terms of input and above average in terms of output science policy makers need to acknowledge this and devise policies that strengthen rather than threaten the functioning of an efficient system c 2004 published by elsevier b v

trimability and fast optimization of long short portfolios optimization of long short portfolios through the use of fast algorithms takes advantage of models of covariance to simplify the equations that determine optimality fast algorithms exist for widely applied factor and scenario analysis for long only portfolios to allow their use in factor and scenario analysis for long short portfolios the concept of trimability is introduced the conclusion is that the same fast algorithms that were designed for long only portfolios can be used virtually unchanged for long short portfolio optimization provided the portfolio is trimable which usually holds in practice

income taxation with intergenerational mobility can higher inequality lead to less progression abstract we introduce the notion of social mobility into an optimal income tax model this is done by allowing earning abilities to be partly innate and partly acquired through investments in human capital education the implications for the optimal re distributive policy are studied

universities as engines of r d based economic growth they think they can two issues raised by increased participation of universities in equity arrangements designed to commercialize faculty research are addressed a the effects that an increased emphasis on patenting faculty research and on enhancing the commercial value of these patents has on the characteristics of academic research net revenue streams and existing channels through which academic research enters the market and b processes of institutional change and imitation whereby changes in the policies of elite research universities exert competitive and emulative pressures on other institutions increased efforts by universities to foster the commercialization of technological innovations erodes the singular position of institutions of higher learning in the united states based on past performance there is little reason to expect that a substantial reallocation of faculty effort towards commercially oriented r d will generate appreciable net revenues for other than a select number of universities these ventures also serve to shift academic researchers from the social roles in which they are most efficient as suppliers of a collective goodscientific and technological knowledge just as very few men are both capable business managers and ingenious inventors so few are at the same time ingenious inventors and exalted altruists some twenty years ago a university professor devised a method for measuring with accuracy the content of butterfat in milk the device if patented would doubtless have yielded him a very handsome income the inventor gave it freely to the public saying modestly that to do so was but part of his duty as a servant of the people and it has come into use the world over we call his conduct noble but our very recognition of its nobility is an admission of its rarity f w taussig inventors and money makers 1915 58

financing education using optimal redistributive taxation abstract in this article the joint use of an income tax and public provision of education as instruments to achieve the government s distributional objectives is considered individuals differ in innate labour productivity and in aptitude to acquire skills through education actual labour productivity depends on both innate skill and the amount of education received using a generalized version of the mirrlees tax problem that incorporates these features qualitative properties of an optimal tax schedule are investigated

a reexamination of the optimal nonlinear income tax abstract this paper investigates mirrlees model of optimal income taxation it provides a concrete example of utility and density functions for which the solution to the usual first order model is not implementable i e and example where the first order approach does not work adding second order conditions leads to an extended model and to implementable solutions if these conditions are binding one gets a kink in the optimal net income schedule and bunching of individuals occurs the properties of an optimal nonlinear income tax are reexamined within the extended model

public selection and financing of r d cooperative projects credit versus subsidy funding abstract in this article we develop an analytical model of the selection process for r d cooperative projects to study the factors that motivate public project selection and corresponding funding using two different financial instruments subsidies and credits for this purpose we propose a three stage empirical strategy to analyse the differential individual effects of several factors on the decisions taken by the public agency this analysis is based on project level data from cooperative r d project calls under the spanish profit initiative for the period 2000 2003 the main results show that the public agency uses the two financial instruments to address different objectives first some projects close to the market are well supported through credits while basic research projects receive only selective support in the form of subsidies second there is significant diversity in the selection and funding of technological areas third regarding the explicit goal of fostering cooperation the public agency selectively favours partnerships with universities and technology institutes through the award of subsidies however there seems to be less incentive for large consortia fourth there are significant regional differences among financed projects and also our data show sharp yearly fluctuations

redistributive taxation in the roy model we consider optimal redistribution in a model where individuals can self select into one of several possible sectors based on heterogeneity in a multidimensional skill vector we show that when the government does not observe the sectoral choice or underlying skills of its citizens the constrained pareto frontier can be implemented with a single non linear income tax we derive formulas for this optimal tax schedule if sectoral inputs are complements a many sector model with self selection leads to optimal income taxes that are less progressive than the corresponding taxes in a standard single sector model under natural conditions however they are more progressive than in a multi sector model without occupational choice or without overlapping wage distributions as in stiglitz 1982

education and taxation policies in the presence of countervailing incentives i examine income taxation and education policy when the government cannot observe individual productivity and there exist conflicting incentives for individuals to understate and overstate their productivity in this setting i identify four possible equilibria and discuss the corresponding taxation education policy mix i show that no general restrictions on optimal taxation and education policy emerge in this environment but each equilibrium and corresponding policy package can be associated with a country on the basis of its relative income and preference for redistribution

imperfect information markets and public provision of education abstract it is shown that recent models of public provision of education overstate the argument against a free market in education with complete information income taxation can render a market irrelevant but the paper also considers examples where a free market in education is necessary even with public provision

a generalized approach to multigeneration project evaluation 1 introductionit is well known that the choice of discount rate plays a significant role in the ranking of projects with varying time paths of costs and benefits for public projects the choice of the appropriate social discount rate sdr is not clear cut even in the context of short lived projects in which costs and benefits occur within a single generation in particular when capital taxes produce a wedge between gross and net rates of return should one discount at the economy s rate of return the before tax rate or the individual s rate of return the after tax rate in the single generation context the literature falls in two camps 1 one camp argues that the appropriate sdr is a weighted average of the gross and net rates of return with weights typically determined by the fractions of resources drawn from consumption and private investment respectively 2 a second camp argues that future benefits should be discounted at the net rate of return but that the initial investment should be multiplied by a scale factor so that the direct costs of the project can be expressed in terms of consumption units 3both approaches suffer from severe implementation problems for the first approach there is no general formula for the weights needed to calculate the sdr as a weighted average of two market rates of return dreze 1974 indeed the appropriate sdr to use is project specific stiglitz 1982 without a systematic methodology to derive project specific sdrs the weighted average approach is hard to implement for the second approach which equalizes the sdr to the net rate of return the scale factor the opportunity cost of public investment must be quantified the opportunity cost of public investment depends on whether resources come from private investment or consumption and on the calculation of the present value of the future consumption yielded by a unit of capital discounted at the net rate of return that is the shadow price of capital as lind 1997 points out however there is no general agreement on a specific procedure for calculating the shadow price of capital indeed the concept of the opportunity cost of public investment suffers the same project dependence problem as the first view of the sdr diamond 1968 multigeneration projects such as nuclear waste disposal natural resource conservation or even social security reform further complicate discount rate choice specifically intergenerational equity in addition to intertemporal efficiency plays a role in determining the appropriate social discount rate for multigeneration public project evaluation 4 as in the single generation context there are two competing views on the appropriate discount rate when evaluating multigeneration projects the descriptive and the prescriptive approaches 5the descriptive approach to discounting is a market based approach it does not rely on an explicit social welfare function swf or the pure time preference rate embedded in the swf however the descriptive approach works under the assumption that intergenerational compensation through changes in the tax debt policy is available 6 it is argued that under appropriate intergenerational compensation the market rates of return are still relevant for calculating the sdr for multigeneration project evaluation and in general the sdr should be a weighted average of the gross and net rates of return this descriptive view of setting the sdr equal to the market return appears to underlie the office of management and budget s omb adoption of 7 as the appropriate discount rate for federal programs 7the intent of the prescriptive approach is to use the social discount rate as an expression of ethical judgment on how consumption of future generations should be compared to consumption of current generations

a pigovian rule for the optimum provision of public goods abstract the integrated treatment of optimal taxation and public expenditure presented here is based on the dual relationship between the prices of private goods and the quantities of public goods the conditions for optimum public good provision can be expressed as a modification of the samuelson conditions with extra terms representing a the distortionary effect of taxes on the willingness to pay for the public good and b distributional effects the former captures pigou s notion of the indirect damage caused by the need to finance public expenditure out of distortionary taxes and we call this the pigou term in certain cases a very simple benefit cost ratio for public projects emerges that is equivalent to measuring benefits as if they were taxed

education and the poverty trap an overlapping generations model is constructed in which individual wealth is related to educational attainment and in which liquidity constraints may induce children to invest in a sub optimal level of education given their ability financing for education is obtained from within the family abilities differ among children and may be related to parental ability stationary state equilibria are found to exist in which children of poorer families are caught in a poverty trap because of an inability to finance their education the role of redistributive policy is studied in this context

university support and the creation of technology and non technology academic spin offs the literature on academic entrepreneurship typically assumes that creating a supportive environment in a university can result in a higher rate of establishment of academic spin offs in a relatively straightforward manner in contrast we argue that at times academics choose to launch an independent company vis a vis pursuing alternative business engagement activities when their university provides inadequate support drawing from hybrid entrepreneurship and necessity entrepreneurship we model the individual decision to spin off as a reaction to the organizational characteristics of the parent university rather than to its outcome through a longitudinal study of 559 spin offs from 85 italian universities from 1999 to 2013 we find that although stronger administrative support from the parent university leads academics to create more technology spin offs a u shaped relationship instead exists between the number of administrative staff within a university and the rate of establishment of non technology spin offs when the level of administrative staff is too low or too high relative to the fitted amount estimated using several university level factors academic staff reacts by establishing firms to achieve improved cash and human resource management

tax revenue and the marginal cost of public funds in sweden abstract we assess the welfare cost of raising a marginal unit of tax revenue in a balanced budget general equilibrium framework the calculated social cost of an increment of public funds is sensitive to both the specific type of tax increase and the type of public spending used on the margin best guess assumptions on labor supply elasticities yield marginal costs of public funds for different fiscal mixes of between 0 67 and 4 51 at prevailing tax rates in sweden alternative labor supply assumptions well within the range of current estimates substantially affect the results and can imply infinite marginal welfare costs marginal welfare costs are also sensitive to assumptions about both the income and substitution effects of labor supply

educational policy in a credit constrained economy with skill heterogeneity an overlapping generations model where agents choose whether to become educated when young is presented education enhances productivity but needs to be financed by borrowing because of the possibility of default lenders may ration credit we characterize the steady state equilibrium with and without credit constraints and show that credit constraints are associated with lower education and a lower real interest rate we then study the role of public policy in remedying the inefficiency which occurs with credit market imperfections and examine whether public education can improve on the constrained equilibrium

the impact of heterogeneity of discount factors and asset returns on inequality abstractwe investigate the effect of differential access to financial markets discount factor and wealth endowment on poverty and inequality we construct a model of educational and savings choice with heterogeneous agents motivated by empirical evidence in this economy the return on savings is a non decreasing function of the amount saved as expected more patient households tend to become wealthier and more educated the heterogeneity on portfolio returns is shown to be key to our main result the model closely fits the data on income and wealth inequalities being able to explain the existing brazil s inequality patterns the model was also calibrated to the us with similar fit we then evaluate two types of public policies based on cash transfer schemes ctss that aim to reduce poverty and inequality we find that the cts version in which receiving the benefit is conditional on educating the household s youngster outperforms its unconditional version in almost all dimensions analysed

negative marginal tax rates and heterogeneity the bulk of the theory of optimal taxation recommends that the marginal tax rate be everywhere positive labor supply is distorted downwards compared with laissez faire the conditions under which the result holds continuous labor supply or intensive margin unobserved productivity constant opportunity cost of work utilitarian planner with a redistributive motive towards lower incomes have been thoroughly investigated jesus seade 1977 1982 ivan werning 2000 martin f hellwig 2007 the purpose of the present paper is to describe how negative marginal tax rates can be optimal keeping with the intensive set up largely studied in the literature when there are multiple dimensions of heterogeneity indeed james a mirrlees 1976 in its section iv indicates along a line that will be pursued further here that the sign of the marginal tax rate cannot be predicted when the agents in the economy differ along several dimensions of heterogeneity workers differ in both their productivities and opportunity costs of work under utilitarianism heterogeneity comes into play through its impact on cardinal utilities how social weights or marginal utilities of income vary with income determines the shape of the optimal tax scheme conditionally on income utility and more importantly its derivative with respect to income may either decrease or increase with work opportunity costs this may vary according to circumstances depending on whether the cost is associated with poor living conditions i e a handicap or reflects a taste for leisure or opportunities outside the labor market such as gardening at home or black market activities for a given income the social weight is proportional to the expected marginal utilities where the expectation is taken over the distribution of work opportunity costs at this income level therefore the social weight curve depends on both the specification of the cardinal utility function and on how the distribution of work opportunity costs changes with income the fact that heterogeneity can blur the redistribution motive through the possible correlation between ability and onerousness of work has been discussed in models where agents have a finite number of types a pioneer work is that of joseph e stiglitz 1982 who shows that the high skilled individual should face a negative marginal tax rate if the low skilled individual s upward incentive constraint binds which is the case if social weights are increasing in type the importance of this observation for policy was pointed out in katherine cuff 2000 who is the first to explicitly link social weights to the opportunity cost of work using alternative choices of cardinal utilities in a model with four types combining two values for productivity and two values for the cost of work robin boadway et al 2002 showed how it can be optimal to have binding upward incentive constraints when high opportunity costs are associated with small social weights

science technology and regional economic development review and prospects abstract this paper reviews the literature on the location and regional effects of science and technology st these pools of mobile workers are most attracted to large urban areas in only some of these areas however does the spin off process result in the generation of new technology based firms the availability of local venture capital appears to be the principal influence on this variation government policy regarding science and technology has impacts on regions by contributing to the agglomeration of r d government policy also often fails to recognize that s t policy and industrial policy have regional effects that may be long term in nature and most detrimental to those regions whose economies are least competitive finally some priorities for future research on innovation in a regional setting are identified

implications for minimum wage policies of an s shaped labor supply curve abstract a model of family labor supply provides a rationale for raising minimum wages when the labor supply response is negative at low wages under those circumstances the labor market can be caught in a malthusian poverty trap of excess supply unemployment overextended workdays child labor and falling wages raising minimum wages may therefore help resorb this excess supply and stabilize the labor market setting a virtuous cycle in motion in a two sector context such a policy would increase wages in both the covered and uncovered sectors evidence from a study of costa rica in particular is consistent with those conclusions

technology transfer and public policy a review of research and theory abstract my purpose is to review synthesize and criticize the voluminous multidisciplinary literature on technology transfer to reduce the literature to manageable proportions i focus chiefly not exclusively on recent literature on domestic technology transfer from universities and government laboratories i begin by examining a set of fundamental conceptual issues especially the ways in which the analytical ambiguities surrounding technology transfer concepts affect research and theory my literature review follows and i emphasize technology transfer s impact and effectiveness i employ a contingent effectiveness model of technology transfer to organize the literature as the model s name implies it assumes that technology effectiveness can take a variety of forms in addition to examining the more traditional effectiveness criteria those rooted in market impacts the model considers a number of alternative effectiveness criteria including political effectiveness capacity building

biosecurity bioterrorism and the governance of science the increasing convergence of science and security policy science and security policy are increasingly overlapping because of concerns that legitimate research might be misapplied to develop biological weapons this has led to an expansion of security policy to cover broad areas of research and scientific practice including funding publishing peer review employment materials transfer post graduate teaching and academics ability to design and perform experiments and disseminate research such changes raise policy concerns because many of the technologies used to produce biological weapons are dual use and have legitimate peaceful applications as a result attempts to control their generation diffusion or application can have unintended impacts on socially beneficial applications this paper explores recent changes in the governance of science and technology and contributes to future policy making by assessing the relative merits of understanding the development of dual use policy in terms of either technology transfer or technology convergence 2007 elsevier b v all rights reserved

progressive taxation redistribution and labor supply the analysis of the effect of progression on labor supply is extended to a model with many consumers the condition for progression to increase labor supply given constant aggregate tax revenue is derived and shown to depend on the income effects resulting from redistribution it is then shown that the optimal linear income tax schedule involves a degree of progression which on the margin does reduce labor supply