equality of opportunity and optimal cash and in kind policies abstract this paper examines the argument for public provision of certain private goods like education and health based on equality of opportunity by studying the utility possibility frontier of a society in which there is a concern for the distribution of these goods a given quality of education or health services can be consumed for free in the public sector but people can opt out and purchase their desired quality levels in the private sector some of the conclusions are i a pure cash transfer is optimal when the utility redistribution is either sufficiently small or large ii if and only if both the equality of opportunity concern and the utility redistribution are large enough can an in kind program which attracts the whole population be justified iii even when everybody chooses the in kind program it may be optimal to perform some additional utility redistribution by increasing the size of such program

workfare wellbeing and consumption evidence from a field experiment with kenya s urban poor abstract restrictions like work requirements and constraints on voucher transfers are often used in social welfare systems but little empirical evidence exists on their impact on wellbeing we conducted a 10 day randomized experiment with 432 individuals living below the poverty line in the kawangware settlement of nairobi kenya testing two elements of social welfare design workfare versus welfare and restricted versus unrestricted vouchers participants were randomly assigned to a work condition involving daily work for unrestricted vouchers or one of two wait conditions involving daily waiting for vouchers that were either unrestricted or partially restricted to staple foods we find that working improved psychological wellbeing relative to waiting suggesting that the means of implementing welfare programs may have important effects on individuals beyond the impact of monetary benefit alone furthermore although the restrictions were inframarginal partially restricted vouchers crowded in spending on staple foods suggesting the existence of a flypaper effect in spending from restricted vouchers

evaluating welfare reform in the united states this paper reviews the economic literature on welfare reform over the 1990s a brief summary of the policy changes is followed by a discussion of the methodological techniques that analyze the effects of these changes on outcomes the paper then critically reviews the econometric and experimental literature on caseload changes labor force changes poverty and income changes and family formation changes a growing body of evidence suggests that recent policy changes have influenced economic behavior and well being one particular set of new style welfare programs seems to show especially promising results with significantly increased work and earnings and reduced poverty

sustainability assessment of energy systems integrating environmental economic and social aspects abstract sustainable development of energy systems requires consideration of all three sustainability dimensions environmental economic and social current work presents a new decision support framework for facilitating this taking a life cycle approach the framework integrates the three sustainability dimensions to enable assessments at both technology and systems levels the framework comprises scenario analysis life cycle assessment life cycle costing social sustainability assessment and multi criteria decision analysis which are used to assess and identify the most sustainable energy options the application of the framework is illustrated on the example of future electricity supply in mexico eleven scenarios up to 2050 have been developed considering different technologies electricity mixes and climate change targets the results show that based on the 17 sustainability criteria used in this work the business as usual scenario mostly based on fossil fuels is unsustainable regardless of the preferences for different sustainability criteria this is mainly due to the high costs and environmental impacts associated with fossil fuels overall the most sustainable scenarios are those with higher penetration of renewables wind solar hydro geothermal and biomass and nuclear power these electricity pathways would enable meeting the national greenhouse gas emission targets by 2050 in a more sustainable way than envisaged by the current policy however some trade offs among the sustainability criteria are needed particularly with respect to the social impacts these trade offs can be explored easily within the decision support framework to reveal how different stakeholder preferences affect the outcomes of sustainability assessment thus contributing to more informed decision and policy making

targeting assistance to the poor efficient allocation of transfers when household income is not observed abstract this paper examines the problem of how to transfer money or other forms of assistance to poor households when one observes some characteristics of households but not their incomes this and related issues are often referred to as the targeting problem the paper first sets out the problem formally as one of minimizing a poverty index given a fixed amount of money available for transfers assuming that household survey data are available which include accurate income and or expenditure information the solution for the problem is formulated as a non linear mathematical programming exercise using household survey data from cote d ivoire the technique is applied to both urban and rural areas separately the paper concludes with a general discussion and suggestions for future research

why democracies produce efficient results by applying the standard tools of microeconomic analysis i argue that democratic markets work as well as economic markets in particular i show that previous work has greatly exaggerated the existence of principal agent and informational problems in electoral markets and has drawn incorrect conclusions

optimality of workfare with heterogeneous preferences with the standard non linear income taxation framework with heterogeneity of preferences in this paper the optimality of workfare as a screening tool is examined it is assumed that workfare does not serve as a human capital investment participation is mandatory and administrative costs are negligible imposing alternative cardinalizations on individuals utilities allows for the possibility that the government optimally redistributes income to or from high disutility of labour individuals under either case it is never optimal to impose workfare on these individuals it is also shown that non productive workfare can be an e cient policy tool in contrast to the results found in besley and coate 1995 brett 1998 and beaudry and blackorby 1997 jel classification h21 h23 optimalite du workfare en presence de preferences heterogenes l auteur examine l timalite du workfare en tant qu instrument de tamisage a l aide du cadre conceptuel traditionnel d imposition non lineaire des revenus en presence de preferences heterogenes on postule que le workfare n est pas un processus d investissement en capital humain que la participatioun est obligatoire et que les couts d administration sont negligeables quand on postule aussi des utilites cardinales differentes pour les individus il devient possible pour le gouvernement de redistribuer optimalement les revenus en faveur ou au detriment des individus pour qui le travail a une tres grande desutilite dans l un et l autre cas on montre que le workfare n est jamais une politique optimale on montre aussi que le workfare dans des activites non productives peut etre un instrument de politique publique e cient contrairement a ce qu a rment besley et coate 1995 brett 1998 et beaudry et blackorby 1997

in kind transfers self selection and optimal tax policy abstract this paper examines the role of public provision of goods as a redistributive mechanism when tax policies are designed optimally on the basis of the information available to the government we characterize pareto efficient allocations that are attainable through the tax policy and derive the conditions under which public provision will enhance welfare above the maximum that can be achieved through a mix of a general income tax and commodity taxes price subsidies first when there are two produced goods we prove that public provision is always pareto improving the improvement is achieved through changing individuals actual consumption levels second with no restrictions on the number of goods we derive a sufficient condition for public provision to be pareto improving this is achieved by weakening self selection constraints so that welfare improving tax changes are made possible suitable examples include provision of day care basic health care and rights to a minimum old age pension

natural disaster impacts and fiscal decentralization in recent years many developing countries have sought to implement more decentralized governmental systems despite efforts toward fiscal federalism assessment of decentralization activity has been hampered by lack of consistent cross country measures of effectiveness since governments play a central role in the management of catastrophic events disaster impact data provide an opportunity to evaluate whether government structure is important in limiting disaster losses we use cross country data over the 1970 2005 period to estimate the relationship between decentralization and disaster casualties countries with more decentralized governments experience fewer disaster induced fatalities jel h73 q54

earthquake fatalities the interaction of nature and political economy to say that the level of fatalities resulting from an earthquake is inversely related to a country s per capita level of income is hardly novel what makes our approach novel is that we relate fatalities to both per capita income and the level of inequality that exists within a country through their joint impact on the likelihood of collective action being taken to mitigate the destructive potential of quakes we first develop a theoretical model which offers an explanation as to why in some environments different segments of society prove incapable of arriving at what all parties perceive to be an agreeable distribution of the burden of the necessary collective action causing the relatively wealthy simply to self insure against the disaster while leaving the relatively poor to its mercy following this we test our theoretical model by evaluating 269 large earthquakes occurring worldwide between 1960 and 2002 taking into account other factors that influence a quake s destructiveness such as its magnitude depth and proximity to population centers using a negative binomial estimation strategy with both random and fixed estimators we find strong evidence of the theoretical model s predictions that is while earthquakes themselves are natural phenomena beyond the reach of humankind our collective inaction with respect to items like the creation and enforcement of building codes failure to retrofit structures and to enact quake sensitive zoning clearly plays a part in determining the actual toll that a given quake takes and it is through these and other examples of collective inaction that limited per capita income and inequality couple together with a given quake s natural destructive power in determining the actual fatalities resulting from a quake

environmental resource planning under cap and trade models for optimization abstract under the conditions of a cap and trade c t program manufacturers are restricted in total greenhouse gas emissions but allowed with options to acquire and dispose environmental resource e g certified emission quota ceq or commercialized permit for emission of certain pollutant via a market system or conduct self purification sp to reduce emission level to satisfy their overall emission needs due to production or service activities this paper analyzes the operational decisions of production systems under cap and trade conditions in which the problem is modeled as a multi stage dynamic optimization problem for each planning period the model specifically addresses the decisions on purchasing ceq reducing emission via sp and carrying over surplus emission quota seq to meet the required emission level driven by production demand for the period it also makes sure that the sum of reduced emission over the whole planning horizon meets exactly a goal of emission reduction specified at the manufacturers discretion other important problem characteristics addressed include the unit cost for reducing emission level via sp to reflect the fact that the cost increases as accumulated emission reduction increases i e the more reduced the more difficult to reduce and time related cost associated with green investment for emission reduction e g interest cost of short term loans these characteristics make the model and related analysis useful for both practitioners and researchers in this area numerical experiments were designed and carried out to verify and validate the proposed concepts

modelling the take up of state support abstract we discuss the modelling of the take up of state support by going beyond the standard analysis and recognising that both the researcher and the welfare agency make errors is assessing entitlement we apply the discussion to an examination of the take up of supplementary benefits in britain by explicitly modelling the costs to taking up state support we can illustrate how these costs can dampen the welfare impact of state support and mitigate or aggravate welfare agency errors in assessing entitlement

income distribution and price controls targeting a social safety net during economic transition abstract during the ongoing post communist economic transitions the relative well being of many people is changing rapidly and governments are not well positioned to accurately measure individual living standards under such circumstances continued price controls over basic consumer goods within the state sector and the associated queuing can form a serviceable device for targeting poor people for subsidies with a fixed price state sector and free price parallel markets rich people might choose to avoid queues and shop in the free markets while poor people would prefer to pay low nominal prices and queue in the state sector the targeting of subsidies through queues therefore can be accomplished even if the government has no information concerning individual income or living standards when the alternative to price controls is a poorly targeted explicit social safety net the resource cost of queues might be more than offset by an improvement in the targeting of subsidies

why countries are fiscally decentralizing this paper models and empirically investigates underlying forces that promote governmental decentralization or effective federalism in the world over the last 25 years a move to a federal system is based on the demand by hinterland regions for local autonomy which increases with national income growth greater relative hinterland population and increasing national population it is influenced as well by the degree of democratization nationally and locally decentralization is measured by both institutional indices indicating greater devolution of power to local governments and the share of local governments in national government consumption empirically the paper finds that decentralization changes in ways predicted in particular it increases with economic growth country size and population institutional structures based on colonial experience and initial constitutional provisions also matter

capitalization and the theory of local public finance the tiebout literature is incomplete this paper argues because it has not fully accounted for the capitalization of local fiscal variables into house values the paper explains why capitalization arises why it persists in long run equilibrium how it affects both residential location and the outcome of local voting and why it interferes with the efficiency of a system of local governments the analysis which is based on the main tiebout assumptions plus a property tax combines a model of household bids in a housing market with a median voter model of local public service determination

public goods self selection and optimal income taxation using the self selection approach to tax analysis this paper derives a modified samuelson rule for the provision of public goods when the government deploys an optimal nonlinear income tax this approach gives a straightforward interpretation of the central result in this area generalises it and provides a simple characterisation of optimal policy in a wide range of circumstances the analysis also emphasises and clarifies the significance of the choice of numeraire for the optimality of decentralising public spending decisions it is well known that the famous samuelson rule for the provision of public goods may not be applicable when the tax revenues used to finance the public goods come from distorting taxes the principle was recognized as long ago as pigou 1947 long before the samuelson rule was devised pigou saw that in addition to the resource cost involved in transferring funds from the private to the public sector there was a deadweight loss involved from this insight he suggested that the criterion for providing public goods should be more stringent than the samuelson rule would later suggest in particular one might expect that the inclusion of the deadweight loss of taxes as part of the cost of providing a public good would lead to a reduction in its optimal provision relative to a situation in which lump sum taxes were available the problem was investigated more systematically by atkinson and stern 1974 who considered the case in which a public good is financed by a set of optimal commodity taxes all individuals were assumed to be identical so efficiency alone dictated the objective they found that no prima facie case could be made for the pigou position that the use of distortionary taxes called for a reduction in the supply of the public good their analysis clearly showed that there were two influences at work when the financing of a public good was by distorting taxes on the one hand

synthesis of environmentally benign energy self sufficient processes under uncertainty abstract this contribution presents a multi objective mixed integer linear programming milp synthesis of a dynamic supply network under uncertainty applied to food industry the previously developed multi objective model for achieving energy self sufficiency by integrating renewables into companies supply networks has now been extended to account for the dynamic consideration of variable supply and demand over the year for uncertainties related to products demand and sun radiation and for multi objective optimisation in order to obtain the most sustainable company s supply network the sustainable synthesis of a company s network is performed regarding the integration of renewables such as biomass and other wastes and solar energy the obtained solutions are those reflecting maximal profit reflecting constantly changing dynamic market conditions accounting for several uncertain parameters and protecting the environment

topping up or opting out the optimal design of public provision schemes there is extensive public provision of private goods in all developed countries the public provision scheme is often designed so that individuals can opt out but not top up supplement the publicly provided quantity quality using an optimal income ta

fiscal federalism and economic growth this paper uses an endogenous growth model with overlapping generations to explore the connection between fiscal federalism and economic growth the analysis shows that federalism which allows public good levels to be tailored to suit the differing demands of young and old consumers who live in different jurisdictions increases the incentive to save this stronger incentive in turn leads to an increase in investment in human capital and a byproduct of this higher investment is faster economic growth

exclusion and the private enforcement of property rights abstract this paper develops a model of exclusion and property rights consumers choose between legal and illegal use a monopoly provider chooses a price for legal use a fine for illegal use and a level of monitoring to detect illegal use this model features a continuum of exclusion regimes instead of only the poles of private and public provision as is typical since the necessity of enforcing property rights creates two classes of users the provider is forced to price discriminate furthermore both the equilibrium and optimum feature imperfect exclusion and equilibrium exclusion is excessive

does rising income increase or decrease damage risk from natural disasters abstract recent empirical literature has found a negative relationship between income per capita and measures of risk from natural disaster supportive of logic that higher incomes allow countries to mitigate disaster risk we argue that behavioral changes at the micro level in response to increasing income such as location choice and extent of costly abatement activity may lead to a non linear relationship between aggregate incomes and disaster damages where the risks increase with income before they decrease in a country year panel data set we show that disaster risk associated with flooding landslides and windstorms increases with income up to gdp per capita levels of 5044 3360 and 4688 per year respectively and decrease thereafter such non linear impacts are absent for other disaster types such as extreme temperature events and earthquakes where the links between human behavioral choices and exposure to risk are not as strong from a policy perspective this suggests that for the least developed countries the dual goals of disaster risk prevention and economic development cannot be assumed to be complementary for all forms of natural disaster in addition to allocating resources to manage disaster risk the poorest nations may have to be more proactive in enacting policies that alter the behavioral choices of citizens that impact a country s exposure to natural disaster risk

can workfare programs moderate conflict evidence from india can public interventions persistently reduce conflict adverse weather shocks through their impact on incomes have been identified as robust drivers of conflict in many contexts an effective social insurance system moderates the impact of adverse shocks on household incomes and hence could attenuate the link between these shocks and conflict this paper shows that a public employment program in india by providing an alternative source of income through a guarantee of 100 days of employment at minimum wages effectively provides insurance this has an indirect pacifying effect by weakening the link between productivity shocks and incomes the program uncouples productivity shocks from conflict leading persistently lower conflict levels

exploring the effect of cap and trade mechanism on firm s production planning and emission reduction strategy abstract cap and trade mechanism has a significant effect on firm s production and operation decisions and carbon emissions this study develops a mathematical model to examine the effect of cap and trade mechanism on firm s production planning and emission reduction strategy based on the model the firm s critical production planning decisions such as the optimal production quantity optimal allowance selling price and the maximum profit under the cap and trade mechanism are derived firstly then based on the cost benefit analysis the conditions under which the firm makes the optimal emission reduction strategy between buying carbon allowance from the carbon trading market and conducting low carbon processing are identified the result suggests that when the low carbon processing cost is greater than the potential opportunity benefit the firm is inclined to purchase carbon allowance from the carbon trading market and vice versa finally a numerical analysis is conducted to investigate the effects of relevant factors such as carbon quotas carbon emission rate low carbon processing cost and transaction cost on firm s production and operation decisions the results indicate that under the cap and trade mechanism the transaction cost has a positive effect on allowance selling price the firm s optimal production quantity and maximum profit is positively related to carbon quotas while negatively related to carbon emission rate and low carbon processing cost this research contributes to enrich related literature and knowledge with regard to carbon emissions reduction at the firm level and highlight the critical importance of cap and trade mechanism in reducing carbon emissions

optimal redistribution with productive social services publicly provided private goods are conventionally considered consumer goods departing from this perspective we analyze the public provision of inputs that improve household productivity e g education and childcare in a two class economy with distorting taxation public provision is always welfare improving with respect to pure taxation given that the public input directly affects household productivity moreover the case for public provision strengthens as households heterogeneity in input demand fades out contrary to consolidated results in the literature the features of optimal provision schemes depend on the nature of publicly provided input namely if it substitutes household productive capacity or just helps households to exploit it

community composition and the provision of local public goods abstract there is considerable evidence suggesting that the composition of the community that is the characteristics of the residents themselves plays a central role in determining levels of important public outputs such as education and public safety this paper explores the normative implications of this evidence we show that optimal community composition involves a trade off between the gains from homogeneity in demands among residents and the gains from heterogeneity in the production of those goods the analysis establishes a role for equalizing intergovernmental grants on efficiency grounds such grants can provide the needed incentives for sustaining heterogeneous communities

do low income housing subsidies increase the occupied housing stock abstract a necessary condition for justifying a policy such as subsidized low income housing either via tenant based rental assistance or construction of public or private projects is that it has a real effect on market outcomes in this paper we examine one aspect of the real effect of subsidized housing does it increase the housing stock if subsidized housing raises the quantity of occupied housing per capita either more people are finding housing or they are being housed less densely on the other hand if subsidized housing merely crowds out equivalent quality low income housing that otherwise would have been provided by the private sector the housing policy may have little real effect on housing consumption using both census place and msa level data from the decennial census and from the department of housing and urban development we ask whether housing markets with more subsidized housing also have more total housing after accounting for housing demand we find that government financed units raise the total number of units in a market although on average one government subsidized unit adds only one third to one half of a unit to the total housing stock there is less crowd out in more populous markets and more crowd out in places where there is less excess demand for subsidized housing as measured by the number of government financed units per eligible person tenant based housing programs such as section 8 certificates and vouchers seem to be more effective than project based programs at targeting subsidized housing units to people who otherwise would not have their own

bidding for firms recently toyota sought a plant location in the united states the 800 million plant will employ 3000 workers and numerous states offered toyota generous investment incentives hoping this would induce toyota to select their state the commonwealth of kentucky won this competition but the price was high the present value of the payments exceeds 125 million the payment of investment incentives for the toyota plant is not unique in 1976 pennsylvania paid 75 million to attract a volkswagen plan nissan honda and mazda received generous investment incentives when locating plants in the united states and this bidding is not limited to states to attract the headquarters of the presbyterian church usa with its 1300 jobs and 38 million annual payroll civic leaders in louisville kentucky offered the church a warehouse and 6 2 million for renovation of the structure bidding the church away from kansas city missouri in this paper we contend that this competition may result from the average cost pricing of publicly provided goods and services 2 when the marginal cost of providing a firm and its workers with public services is less than the tax revenue they generate a government may offer the firm subsidies that reduce the distortions the average cost pricing of the public service creates thus this competition for industry is not a zero sum game where the subsidies are only transfers from the government to the firm rather these subsidies may facilitate the efficient location of industry

can higher prices stimulate product use evidence from a field experiment in zambia the controversy over how much to charge for health products in the developing world rests in part on whether higher prices can increase use either by targeting distribution to high use households a screening effect or by stimulating use psychologically through a sunk cost effect we develop a methodology for separating these two effects we implement the methodology in a field experiment in zambia using door to door marketing of a home water purification solution we find evidence of economically important screening effects by contrast we find no consistent evidence of sunk cost effects jel c93 d12 i11 m31 o12

large cash transfers to the elderly in south africa we examine the social pension in south africa where large cash sums about twice the median per capita income of african households are paid to people qualified by age but irrespective of previous contributions we present the history of the scheme and use a 1993 nationally representative survey to investigate the redistributive consequences of the transfers documenting who receive the pensions their levels of living and those of their families we also look at behavioural effects particularly the effects of the cash receipts on the allocation of income to food schooling transfers and savings in south africa a large social pension about twice the median per capita income of african households is paid in cash to people qualified by age irrespective of previous contributions we present the history of the scheme and explain how such large transfers could come about in an economy in which the recipients were not only politically weak but without any political representation whatsoever we then use a 1993 nationally representative survey to investigate the redistributive consequences of the transfers documenting who receive the pensions their levels of living and those of their families we also look at behavioural effects particularly the effects of the cash receipts on the allocation of income to food schooling transfers and savings the pressing policy issue for south africans is whether it makes sense to target seven billion rand nearly 2 billion of social expenditure through the current pension schemes our analysis contributes to the discussion by documenting the redistributive and behavioural effects of the transfers we find that at least as far as immediate incidence is concerned and without allowance for behavioural effects the social pension is an effective tool of redistribution and that the households it reaches are predominantly poor because so many of the elderly among south africa s african population live with children the social pension is also effective in putting money into house

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

decentralization of governance and development all around the world in matters of governance decentralization is the rage even apart from the widely debated issues of subsidiarity and devolution in the european union and states rights in the united states decentralization has been at the center stage of policy experiments in the last two decades in a large number of developing and transition economies in latin america africa and asia the world bank for example has embraced it as one of the major governance reforms on its agenda for example world bank 2000 burki perry and dillinger 1999 take also the examples of the two largest countries of the world china and india decentralization has been regarded as the major institutional framework for the phenomenal industrial growth in the last two decades in china taking place largely in the nonstate nonprivate sector india ushered in a landmark constitutional reform in favor of decentralization around the same time it launched a major program of economic reform in the early 1990s on account of its many failures the centralized state everywhere has lost a great deal of legitimacy and decentralization is widely believed to promise a range of benee ts it is often suggested as a way of reducing the role of the state in general by fragmenting central authority and introducing more intergovernmental competition and checks and balances it is viewed as a way to make government more responsive and efe cient technological changes have also made it somewhat easier than before to provide public services like electricity and water supply relatively efe ciently in smaller market areas and the lower levels of government have now a greater ability to handle certain tasks in a world of rampant ethnic cone icts and separatist movements decentralization is also regarded as a way of diffusing social and political tensions and ensuring local cultural and political autonomy these potential benee ts of decentralization have attracted a very diverse range

on the form of transfers to special interests an important question in political economy concerns the form of transfers to special interests the chicago view is that political competition leads politicians to make such transfers efficiently the virginia position is that lack of information on the part of voters leads politicians to favor inefficient sneaky methods of redistribution this paper analyzes the form of transfers in a model of political competition in which politicians have incentives to make transfers to special interests it shows that when voters have imperfect information about both the effects of policy and the predispositions of politicians inefficient methods of redistribution may be employed

do non monetary prices target the poor evidence from a field experiment in india monetary price subsidies are often used to increase take up of health products but monetary prices may screen out those with the highest returns the poor using willingness to pay wtp data from a field experiment in india this paper determines whether nonmonetary prices better target health products to the poor than monetary prices it is found that monetary wtp is increasing in income and nonmonetary wtp is weakly decreasing in income comparing across price types nonmonetary wtp falls relative to monetary wtp as income rises nonmonetary prices better target the poor than monetary prices a larger fraction of total demand is poor

production optimization considering environmental performance and preference in the cap and trade system abstract many countries like china are in a dilemma between economic growth and environmental deterioration e g smog weather simultaneously a growing people concern the product s environmental performance along with their improving environment awareness this paper focuses on the impacts of carbon footprint and low carbon preference on the production decision of emission dependent firms in the cap and trade system the cap and trade system uses the total cap to attain environmental goals and allows trade to achieve the effective scheduling through market regulation under this mechanism through analyzing the influence of carbon footprint and low carbon preference on the market supply and demand we build a production optimization model and develop the optimal decisions several interesting management insights on environmental preference and policy are concluded

targeting in medicaid the costs and enrollment effects of medicaid s citizenship documentation requirement abstract the deficit reduction act of 2005 imposed a federal requirement that all individuals provide citizenship documentation when applying for or renewing medicaid coverage this represented a change in policy for 46 states using differences in differences to analyze data from the current population survey 2004 2008 this paper shows that the policy reduced medicaid enrollment among non citizens as intended and did not significantly affect citizens one in four adult non citizens in medicaid 390 000 total and one in eight child non citizens 81 000 were screened out by the policy annually child non citizens were more likely to become uninsured afterwards while adult non citizens appeared to shift from medicaid to other coverage overall the citizenship documentation requirement reduced medicaid participation among non citizens in an appropriately targeted way nonetheless a cost benefit analysis indicates that the policy was a net loss to society of 600 million through increased state administrative spending and compliance costs imposed on u s citizens applying for medicaid

natural disasters impact factors of resilience and development a meta analysis of the macroeconomic literature abstract we systematize 64 primary studies published in 2000 2013 on the macroeconomic impact of natural disasters by providing ols and generalized ordered probit meta analyses for 1858 and 1991 regressions respectively we investigate how the reported results in the primary studies are influenced by the empirical design the estimation technique and or publication bias we analyze primary studies on disaster direct costs and indirect costs separately according to our meta analysis disasters on average have a negative impact in terms of direct costs and an insignificant impact in terms of indirect costs mst and fat pet peese estimates motivate the meta analyses showing the need for a multivariate approach to consider strong systematic research heterogeneity time based characteristics of the data and publication bias strongly impact on the results of the primary studies thus implying the need for authors to carefully consider the selection of time period and for research institutions to understand the sources of selection bias in disseminated results we argue that further research is necessary on the heterogeneity of results of indirect cost studies and suggest that future studies on the macroeconomic impact of disasters should explore more often the mitigation role of education investment and openness by including these as explanatory variables

mobility and redistribution the ability of individuals to move freely from one jurisdiction to another is generally seen as a constraint on the amount of redistribution that each jurisdiction within a system of governments can undertake in this paper we look at this proposition by developing a positive analysis of income redistribution by local governments in a federal system we ask how much redistribution occurs when only local governments can have tax transfer instruments individuals can move freely among jurisdictions and voters in each jurisdiction are fully aware of the migration effects of redistributive policies local redistribution is shown to induce sorting of the population with the poorest households located in the communities that provide the most redistribution while the threat of out migration affects the potential for redistribution our results suggest that significant local redistribution is nonetheless feasible numerical computations indicate that the proportion of residents who are renters is a major factor affecting the local choice of level of redistribution

take up and targeting experimental evidence from snap this paper develops a framework for evaluating the welfare impact of various interventions designed to increase take up of social safety net programs in the presence of potential behavioral biases we calibrate the key parameters using a randomized field experiment in which 30 000 elderly individuals not enrolled in but likely eligible for the supplemental nutrition assistance program snap are either provided with information that they are likely eligible provided with this information and also offered assistance in applying or are in a status quo control group only 6 percent of the control group enrolls in snap over the next 9 months compared to 11 percent of the information only group and 18 percent of the information plus assistance group the individuals who apply or enroll in response to either intervention receive lower benefits and are less sick than the average enrollee in the control group the results are consistent with the existence of optimization frictions that are greater for needier individuals suggesting that the poor targeting properties of the interventions reduce their welfare gains

fiscal decentralization and economic growth reconsidered recent studies examining the relation between fiscal decentralization and economic growth have failed to take account of the extent of the independent taxing powers available to sub national governments and thus have substantially overstated the degree of effective decentralization results from a cross section study of 19 oecd member countries suggest that when the measure of fiscal decentralization is limited to the revenues over which sub national governments have full autonomy its impact on economic growth is not statistically significant

optimal minimum wage policy in competitive labor markets this paper provides a theoretical analysis of optimal minimum wage policy in a perfectly competitive labor market and obtains two key results first we show that a binding minimum wage while leading to unemployment is nevertheless desirable if the government values redistribution toward low wage workers and if unemployment induced by the minimum wage hits the lowest surplus workers first importantly this result remains true in the presence of optimal nonlinear taxes and transfers in that context a binding minimum wage enhances the effectiveness of transfers to low skilled workers as it prevents low skilled wages from falling through incidence effects second when labor supply re sponses are along the extensive margin only the co existence of a minimum wage with a positive tax rate on low skilled work is always second best pareto ineffcient a pareto improving policy consists of reducing the pre tax minimum wage while keeping constant the post tax minimum wage by increasing transfers to low skilled workers and financing this reform by increasing taxes on higher paid workers overall our results imply that the minimum wage and subsidies for low skilled workers are complementary policies pa

regional allocation of co2 emissions allowance over provinces in china by 2020 the mitigation efforts of china are increasingly important for meeting global climate target since the rapid economic growth of china has led to an increasing share in the world s total co2 emissions this paper sets out to explore the approach for realizing china s national mitigation targets submitted to the unfccc as part of the copenhagen accord that is to reduce the intensity of co2 emissions per unit of gdp by 40 45 by 2020 as well as reducing the energy intensity and increasing the share of non fossil fuel consumption through regional allocation of emission allowance over china s provinces since the realization of china s mitigation target essentially represents a total amount emission allowance allocation problem an improved zero sum gains data envelopment analysis optimization model which could deal with the constant total amount resources allocation is proposed in this study by utilizing this model and based on several scenarios of china s economic growth co2 emissions and energy consumption a new efficient emission allowance allocation scheme on provincial level for china by 2020 is proposed the allocation results indicate that different provinces have to shoulder different mitigation burdens in terms of emission intensity reduction energy intensity reduction and share of non fossil fuels increase

how can china reach its co2 intensity reduction targets by 2020 a regional allocation based on equity and development in late 2009 the chinese government committed to cut its carbon dioxide emissions per unit of gross domestic product gdp by 40 to 45 of 2005 levels by 2020 this has raised the issue of how to allocate the co2 reduction target regionally to meet the national reduction target to meet this objective the following aspects may be taken into consideration equity principles common but differentiated responsibilities intensity reduction target fulfillment and economic difference and reduction potential among provinces this paper selects per capita gdp accumulated fossil fuel related co2 emissions and energy consumption per unit of industrial added value as indicators for emission reduction capacity responsibility and potential respectively based on these three indicators a comprehensive index is developed and an intensity allocation model constructed as decision makers may have different preferences when allocating the reduction burden we allocate different weights to the indicators analyzing the results using cluster analysis the following aspects may also be considered together with the national regional development strategy to determine how to share the burden the reduction potential of various regions implementation potential of the plans and promotion of a highly efficient low carbon economic development model

targeting transfers through restrictions on recipients our objective is to design transfer programs that maximize some social welfare function following the optimal income tax formulation we assume that a random process endows individuals with characteristics that influence welfare such as ability to earn income medical condition or unmonitorable income the goal is to maximize the utility of a randomly chosen individual other individualistic social welfare functions would lead to equivalent results if the random characteristics were observable a first best outcome could be achieved by making them the basis for lump sum transfers in practice however we can observe only indicators of these characteristics such as earnings medical expenditures or consumption patterns the challenge for policy is to design an efficient second best transfer program based on indicators in this paper we argue that 1 an optimal transfer program in general must sacrifice productive efficiency to target efficiency this is done by imposing restrictions on the choices made by intended beneficiaries 2 a program that incorporates restrictions such as means tested in kind transfers commodity specific taxes and subsidies and even ordeals i e the imposition of deadweight costs to qualify for a transfer will perform better than programs that rely solely on income taxes and cash transfers

the effect of disability payments on household earnings and income evidence from the ssi children s program abstract i estimate the effect of removing children with disabilities from supplemental security income ssi on parental earnings and household disability receipt using administrative data from the social security administration ssa i implement regression discontinuity and differencein differences designs based on changes in ssa s budget for child medical reviews i find that parents fully offset the ssi loss with increased earnings and the loss of the child s ssi payment reduces disability applications by parents and siblings but does not reduce their actual disability receipt i examine alternative hypotheses for the large parental earnings response

optimal investment and uncertainty on china s carbon emission abatement abstract to realize environmentally sustainable development of the economy china has decided to cut carbon dioxide emissions per unit of gdp by 40 to 45 percent by 2020 compared with the level in 2005 based on china s emission abatement target this paper first analyzes enterprises emission reduction pathways in practical production processes and then develops a framework to derive the magnitude of investment required in each pathway in order to achieve the designated target at the minimal cost under the framework it is found that in the absence of policy guidance individual enterprises emission reduction investments deviate from the optimal level to correct the distortion an alternative option is provided meanwhile to ensure achievement of the emission reduction target a stochastic model is introduced to measure the uncertainty arising from emission abatement investment the results show that an appropriate emission abatement ratio can reduce the systemic risk of emission abatement finally a simulation is given to demonstrate the results derived from the stochastic model

including sustainability criteria into inventory models research on sustainability performance has considerably enriched operations management literature in recent years however work with quantitative models is still scarce this paper contributes by revisiting classical inventory methods taking sustainability concerns into account we believe that reducing all aspects of sustainable development to a single objective is not desirable we thus reformulate the classical economic order quantity model as a multiobjective problem we refer to this model as the sustainable order quantity model then a multi echelon extension of the sustainable order quantity model is studied for both models the set of efficient solutions pareto optimal solutions is analytically characterized these results are used to provide some insights about the effectiveness of different regulatory policies to control carbon emissions we also use an interactive procedure that allows the decision maker to quickly identify the best option among these solutions the proposed interactive procedure is a new combination of multi criteria decision analysis techniques

fiscal decentralization and natural hazard risks at least to some extent due to pressure from international donors many countries have become more fiscally decentralized the underlying premise being that greater decentralization might improve the provision of local public goods and services we test this proposition by determining whether relatively more decentralized countries fare better when natural disasters strike in terms of its effects on the population overall we find evidence supporting our maintained hypothesis though the effect appears much more robust in developing countries

distinguishing income from substitution effects in disability insurance a set of studies conducted over the last 15 years has produced a near consensus that the social security disability insurance system ssdi has substantial disincentive effects on the labor supply of near elderly males diminishing labor force participation increasing the sensitivity of labor force exit decisions to adverse economic shocks and encouraging those nearing retirement to claim disability benefits and subsequently transfer into the social security retirement program yet efforts by the social security administration ssa to encourage labor supply among the disabled by removing the work disincentives built into ssdi have been almost entirely unsuccessful most notably in 1999 congress authorized the ticket to work program which provides an array of inducements for current ssdi beneficiaries to take up employment including permitting a trial work period of up to nine months providing 7 75 years of ongoing medicare eligibility following return to work and providing three years of automatic benefit reinstatement when claimants workplace earnings fall below a threshold level each of these steps reduces the implicit tax placed on labor supply by the ssdi program despite these lures fewer than 1 400 0 01 percent of the 12 2 million tickets issued to date have led to successful workforce integration autor and duggan 2006

decentralization and corruption evidence across countries the relationship between decentralization of government activities and the extent of rent extraction by private parties is an important element in the recent debate on institutional design the theoretical literature makes ambiguous predictions about this relationship and it has remained virtually unexamined by empiricists the authors make a first attempt at examining the issue empirically by looking at the cross country relationship between fiscal decentralization and corruption as measured by a number of different indices their estimates suggest that fiscal decentralization in government spending is significantly associated with lower corruption moreover they find that the origin of a country s legal system for example civil versus common legal code performs extremely well as an instrument for decentralization the estimated relationship between decentralization when so instrumented and corruption is even stronger the evidence suggests a number of interesting areas for future work including investigating whether there are specific services for which decentralized provision has a particularly strong impact on political rent extraction and understanding the channels through which decentralization succeeds in keeping corruption in check

self screening in targeted public transfer programs the self screening properties of initial eligibility determination a mechanism often under the control of the administrators of targeted transfer programs are derived and the use of this mechanism in the social security disability insurance system is explored empirically an increase in the rigor of initial eligibility screening may discourage potential applicants because they are unaware of appeal prospects and because the eligibility decision delay is lengthened as denied applicants are forced to appeal their claims in the disability program a 10 percent increase in the initial denial rate induces a 4 percent decrease in applications self selection is nonperverse

assigning resources to budget constrained agents this article studies different methods of assigning a good to budget constrained agents schemes that assign the good randomly and allow resale may outperform the competitive market in terms of utilitarian efficiency the socially optimal mechanism involves random assignment at a discount an in kind subsidy and a cash incentive to discourage low valuation individuals from claiming the good copyright oxford university press

equilibrium and inefficiency in a community model with peer group effects public service output depends on input expenditures on own personal characteristics and on the characteristics of the other residents in the community the peer group effect in a community model with public expenditures set by voting with migration between communities and with land price differentials capitalization it is shown that communities may become heterogeneous in composition and second best inefficient this equilibrium occurs when the peer group effect is neither too strong nor too weak the inefficiency arises because an externality is created by migration the land price differential does not play the part of the price of the better peer group but of a transfer payment

price subsidies diagnostic tests and targeting of malaria treatment evidence from a randomized controlled trial author s dupas pascaline cohen jessica schaner simone abstract both under and over treatment of communicable diseases are public bads but efforts to decrease one run the risk of increasing the other using rich experimental data on household treatment seeking behavior in kenya we study the implications of this tradeoff for subsidizing life saving antimalarials sold over the counter at retail drug outlets we show that a very high subsidy such as the one under consideration by the international community dramatically increases access but nearly half of subsidized pills go to patients without malaria we study two ways to better target subsidized drugs reducing the subsidy level and introducing rapid malaria tests over the counter

climate and international trade policies when emissions affect production possibilities abstract in this paper we develop a model of international trade and climate change in which emission discharges arising from production have a feedback effect on national production sectors by impacting upon effective factor endowments with this context the objectives are first to provide a general characterization of pareto efficient climate and trade policies and second to examine the possibility starting from non pareto efficient equilibria for pareto improving environmental policies we provide conditions under which several particular reforms of carbon taxes are welfare improving

subsidies as sorting devices abstract the divergence between tax payments and the cost of providing public services that arise from financing local public services provides an incentive for higher income communities to deter the entry of lower income households into their community here we demonstrate that higher income households to insure that low income households do not enter their community or reduce the number that do enter subsidize goods consumed by higher income households more than by lower income households this strategy will make the rich community less attractive to the poor deterring their entry to the community

attachment to home and efficient purchases of population in a fiscal externality economy abstract this paper examines the efficiency properties of an economy characterized by strategically competing regions and individuals with varying degrees of attachment to home in an otherwise standard fiscal externality setting regional authorities may make interregional transfers in purchasing preferred populations however there is a range of distributions of resources over which neither region makes transfers nevertheless all equilibrium allocations resulting from the nash behavior of regional authorities including those that involve no transfers are efficient therefore in contrast to the standard conclusions of the fiscal externality literature there is no efficiency role for a central authority

assessing the incidence and efficiency of a prominent place based policy abstract this paper empirically assesses the incidence and efficiency of round i of the federal urban empowerment zone ez program using confidential microdata from the decennial census and the longitudinal business database using rejected and future applicants to the ez program as controls we find that ez designation substantially increased employment in zone neighborhoods and generated wage increases for local workers without corresponding increases in population or the local cost of living the results suggest the efficiency costs of first round ezs were relatively modest jel h26 h77 j31 r23 r58

the effect of recipient contribution requirements on support for social programs abstract a large literature examines the use of recipient contribution requirements in social programs to target people who most need and value aid yet little is known about public support for such requirements in a field experiment with a nationally representative sample we examine the effect of recipient contributions on charitable donations to a food aid program the response to recipient monetary contributions is non monotonic donations increase when recipients make small monetary contributions and return to baseline under large recipient contributions recipient time contribution requirements also increase program support results from additional treatments suggest that individuals use contribution requirements to increase both allocative efficiency screening recipients who most value the good and targeting efficiency screening recipients most in need our work informs the design of social programs which must respond to the preferences of voters and donors who provide political and financial support

a newsvendor approach to compliance and production under cap and trade emissions regulation abstract since the 1990s governmental agencies have increasingly turned to market based cap and trade programs to control the emission of pollutants firms subject to cap and trade regulation are typically required to acquire emissions allowances via open auction markets the cost to acquire allowances may impose a substantial financial burden on a firm while emissions reduction efforts may eliminate some firm s need to acquire additional allowances there are still numerous firms that need to purchase additional allowances on the open market this study presents a new forward buying heuristic designed for those firms that need to purchase emissions allowances via auctions which reduces the impact of emissions allowance acquisitions on the firms financial performance the heuristic designated as the newsvendor production planning with emissions allowance forward buying nppafb method applies a forward buying algorithm to determine the number of periods for which to forward buy allowances the current production order up to level and the current and future emissions allowance requirements which serves as the order up to level for allowance purchases additionally nppafb also authorizes unused emissions allowances to be sold when market conditions are favorable compared against three existing production planning and allowance procurement strategies a simulation exercise finds that the nppafb method significantly reduces a firm s emissions allowance expenditures these results indicate that heuristic can be readily adopted by any firm that is required to procure emissions allowances via open markets in an effort to improve the firm s profitability

can public works increase equilibrium wages evidence from india s national rural employment guarantee abstract we estimate the impact of the world s largest public works program india s national rural employment guarantee scheme nregs on agricultural wages nregs was rolled out across india in three distinct phases and this phased introduction is used to identify difference in difference estimates of the program effect using monthly data on wage rates from the period 2000 2011 in 209 districts across 18 indian states we include district specific fixed effects and trends to control for differences in wage rates in the absence of the program we find that on average the program boosted the growth rate of real daily agricultural wages by 4 3 per year the effect of the scheme is more consistent with an increase in the growth rate of wages than with a discontinuous jump in wages the effect was concentrated in some states and in the agricultural peak season appears to have been gender neutral and was biased towards unskilled labor since many of the world s poorest depend on casual agricultural labor for their livelihood while at the same time minimum wage legislation is unlikely to be effective in many developing countries we argue that rural public employment programs constitute a potentially important anti poverty policy tool

economic development and the impacts of natural disasters abstract we use disaster impact data over time to examine the degree to which the human and economic losses from natural disasters are reduced as economies develop we find that countries with higher income higher educational attainment greater openness more complete financial systems and smaller government experience fewer losses

decentralization and the productive efficiency of government evidence from swiss cantons advocates of fiscal decentralization argue that among other benefits it can increase the efficiency of delivery of government services this paper is one of the first to evaluate this claim empirically by looking at the association between expenditure decentralization and the productive efficiency of government using a data set of swiss cantons we first provide careful evidence that expenditure decentralization is a powerful proxy for legal local autonomy further panel regressions of swiss cantons provide robust evidence that more decentralization is associated with higher educational attainment we also show that these gains lead to no adverse effects across education types but that male students benefited more from educational decentralization closing for the swiss case the gender education gap

efficiency equilibrium and exclusion when the poor chase the rich using a simple adverse selection model we characterize equilibrium when the rich chase the poor if communities are established by competitive entrepreneurs the equilibrium exists is unique and is efficient it involves either complete separation or complete pooling different income groups may rank these qualitative outcomes differently we show how restrictions imposed by a central government may alter the nature of equilibrium such restrictions may be explained as the choice of a low income majority altering the equilibrium to the pooling outcome which they prefer

the paper work of medicine understanding international medical costs this paper draws on international evidence on medical spending to examine what the united states can learn about making its healthcare system more efficient we focus primarily on understanding contemporaneous differences in the level of spending generally from the 2000s medical spending differs across countries either because the price of services differs for example a coronary bypass surgery operation may cost more in the united states than in other countries or because people receive more services in some countries than in others for example more bypass surgery operations within the price category there are two further issues whether factors earn different returns across countries and whether more clinical or administrative personnel are required to deliver the same care in different countries we first present the results of a decomposition of healthcare spending along these lines in the united states and in canada we then delve into each component in more detail administrative costs factor prices and the provision of care received bringing in a broader range of international evidence when possible finally we touch upon the organization of primary and chronic disease care and discuss possible gains in that area

fiscal decentralization and economic growth a cross country study abstract we use a panel data set of 46 countries over the 1970 1989 period to investigate the relationship between fiscal decentralization and economic growth we find a negative relationship between fiscal decentralization and growth in developing countries but none in developed countries several explanations are offered for our findings

optimal jurisdictional fragmentation and mobility abstract tiebout s hypothesis is examined in a model with the continuum of income classes and no economies of scale of population in public output provision any efficient allocation of resources can be achieved in this model by a system of jurisdictions each containing a separate income class and each using a local property tax to finance local public output however in general at most one such allocation will be an equilibrium if residents can vote with their feet conditions are derived under which higher income residents will locate in jurisdictions providing a higher level of public output these are shown necessary given a separable utility function for any optimal allocation to be sustainable as an equilibrium when residents are mobile

multi item production planning with carbon cap and trade mechanism abstract carbon emission control becomes a challenge in recent years and carbon emission trading is an effective way to curb carbon emission this paper investigates the multi item production planning problem with carbon cap and trade mechanism in which a firm uses a common capacity and carbon emission quota to produce multiple products for fulfilling independent stochastic demands and the firm can buy or sell the right to emit carbon on a trading market of carbon emission a profit maximization model is proposed to characterize the optimization problem the optimal policy of production and carbon trading decisions is analyzed and an efficient solution method with linear computational complexity is presented for solving the optimal solution the impacts of carbon price carbon cap on the shadow price of the common capacity production decisions carbon emission and the total profit are investigated the comparisons of the carbon cap and trade policy and the taxation policy are given to show the effectiveness of the policies numerical analyses are presented for illustrating our findings and obtaining some managerial insights and policy implication

imperfect tagging in social insurance programs abstract this paper derives the optimal benefit structure of an earnings insurance program when a characteristic or tag imperfectly identifies those unable to work with a two sided classification error the optimal program is a dual work incentive system with a work non work consumption differential maintained for the tagged and untagged just sufficient to induce the able in each group to work and with more generous payments to tagged than to untagged individuals of the same work status it includes premiums to program eligible individuals who work a price missing in the u s social security disability system and in earlier attempts to characterize the optimal disability program

the regional distribution of public employment theory and evidence abstractthe regional distribution of public employment theory and evidence regional studies this article analyzes the optimal regional pattern of public employment in an information constrained second best redistribution policy it shows that regionally differentiated public employment can serve as an expenditure side tagging device bypassing or relaxing the equity efficiency trade off the optimal pattern exhibits higher levels of public employment in low productivity regions and is more pronounced the higher is the degree of regional inequality empirically using a panel of european regions from 1995 to 2007 the analysis finds evidence that public employment is systematically higher in low productivity regions the latter effect is stronger in countries with higher levels of regional inequality

consumption and poverty how effective are in kind transfers the ability of in kind transfers to alleviate poverty depends on accurate targeting as well as recipients valuations of the benefits using data from the consumer expenditure surveys the efficiency of in kind transfers is examined in a microsimulation framework in which recipients are identified as those who have the lowest consumption in this framework in kind transfers of food capital services which includes housing and consumer services are an effective means of providing support to the poor even at high levels of subsidization the multiple good transfers that are considered are essentially equivalent to cash grants copyright 1996 by royal economic society

welfare reform and the race to the bottom theory and evidence economists have argued that welfare migration leads to a race to the bottom in the choice of welfare benefits although a system of federal matching grants can remedy this problem the recent welfare reform law replaced the existing matching grant structure with block grants a policy change that appears undesirable to judge whether this critique of welfare reform is justified this paper evaluates the evidence in favor of a race to the bottom after explaining the theoretical effects of welfare migration the paper surveys the empirical evidence on the occurrence of such migration concluding that the evidence is mixed the discussion also considers recent empirical tests for strategic interaction which show that benefit levels in nearby states affect a given state s benefit choice the most plausible source of such interaction is a concern about welfare migration which leads policymakers to look at benefits in neighboring states when making their own choices judging that the evidence appears consistent with the existence of a race to the bottom the paper concludes that the demise of matching grants may be undesirable from a policy perspective

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