global inequality how large is the effect of top incomes abstract despite the growing interest in global inequality assessing inequality trends is a major challenge because individual data on income or consumption is not often available nevertheless the periodic release of certain summary statistics of the income distribution has become increasingly common hence grouped data in form of income shares have been conventionally used to construct inequality trends based on lower bound approximations of inequality measures this approach introduces two potential sources of measurement error first these estimates are constructed under the assumption of equality of incomes within income shares second the highest income earners are not included in the household surveys from which grouped data is obtained in this paper we propose to deploy a flexible parametric model which addresses these two issues in order to obtain a reliable representation of the income distribution and accurate estimates of inequality measures this methodology is used to estimate the recent evolution of global interpersonal inequality from 1990 to 2015 and to examine the effect of survey under coverage of top incomes on the level and direction of global inequality overall we find that item non response at the top of the distribution substantially biases global inequality estimates but more importantly it might also affect the direction of the trends

income inequality in france 1901 1998 this paper uses data from income tax returns 1915 98 wage tax returns 1919 98 and inheritance tax returns 1902 94 in order to compute homogeneous yearly estimates of income wage and wealth inequality for twentieth century france the main conclusion is that the decline in income inequality that took place during the first half of the century was mostly accidental in france and possibly in a number of other countries as well wage inequality has been extremely stable in the long run and the secular decline in income inequality is for the most part a capital income phenomenon holders of large fortunes were badly hurt by major shocks during the 1914 45 period and they were never able to fully recover from these shocks probably because of the dynamic effects of progressive taxation on capital accumulation and pretax income inequality

the economics of iron deficiency abstract this paper examines the evidence for a causal relationship between iron deficiency and a variety of functional consequences with economic implications motor and mental impairment in children and low work productivity in adults to the extent that we can be confident that iron deficiency does cause a consequence with economic implications this effect is quantified in economic terms illustrative calculations for 10 developing countries suggest that the median value of annual physical productivity losses due to iron deficiency is around 2 32 per capita or 0 57 of gdp median total losses physical and cognitive combined are 16 78 per capita 4 05 of gdp using a cost of 1 33 per case of anemia prevented from one of the few effectiveness studies of national fortification allows us to calculate the benefit cost ratio for long term iron fortification programs the median value is 6 1 for the 10 countries examined and rises to 36 1 including the discounted future benefits attributable to cognitive improvements this paper improves on previous work by including a much more thorough survey of the quantitative magnitudes involved and by incorporating effects of iron deficiency on cognition however more research is needed to verify the accuracy of the assumptions needed for this type of analysis

joint management of emission abatement and technological innovation for stock externalities we investigate how emission abatement and technological innovation provide different solutions to reduce pollutant emissions in the case of a stock externality emission abatement leads to a smooth and continuous adjustment of emissions conversely technological innovation has to be interpreted as an option on a less polluted environment and can justify the use of a pollution threshold above which it is optimal to start a research and development programme for a less polluting technology it is shown that technological innovation interferes with the traditional emission abatement approach the optimal abatement level is logically lowered once the less polluting technology is available nevertheless a temporary increase in emissions is optimal during the research and development period the usual pigouvian tax system proves to remain an efficient corrective instrument a numerical application to the greenhouse effect is provided

the evolution of high incomes in northern america lessons from canadian evidence this paper uses tax statistics to construct new series on canadian top income shares from 1920 to 2000 and provides a systematic comparison with the u s experience as in the united states top income shares in canada display a ushaped pattern over the century with a precipitous drop during world war ii followed by a slower decline until 1970 since the late 1970s top income shares have been increasing dramatically and the very top shares are now as high as in the pre war era as in the united states the recent increase in top income shares is the consequence of a surge in top wages and salaries the canadian experience since the late 1970s does not appear to be well explained by tax changes suggesting that the upward trend in canada derives from the united states perhaps because many high income canadians have an emigration option this in turn suggests that the recent increase in u s personal income top shares is not merely a change in tax reporting behavior the recent sharp increase in top income shares in canada is of the same magnitude at the individual and family level and is not due to an increase in income mobility

multivariate measures of well being and an analysis of inequality in the michigan data we demonstrate a multidimensional approach for combining several indicators of well being including the traditional money income indicators this methodology avoids the difficult and much criticized task of computing imputed incomes for such indicators as net worth and schooling inequality in the proposed composite measures is computed using relative inequality indexes that permit simple analysis of both the contribution of each welfare indicator and its factor components and within and between components of total inequality when the population is grouped by income levels age gender or any other criteria the analysis is performed on u s data using the michigan survey of income dynamics

positive and normative judgments implicit in u s tax policy and the costs of unequal growth and recessions calculating the welfare implications of changes to economic policy or shocks requires economists to decide on a normative criterion one approach is to elicit the relevant moral criteria from real world policy choices converting a normative decision into a positive inference as in the recent surge of inverse optimum research we find that capitalizing on the potential of this approach is not as straightforward as we might hope we perform the inverse optimum inference on u s tax policy from 1979 through 2010 and argue that the results either undermine the normative relevance of the approach or challenge conventional assumptions upon which economists routinely rely when performing welfare evaluations

poverty comparisons over time and across countries in africa abstract we use demographic and health surveys dhs to compare poverty at two or more points in time within and between african countries our welfare measure is an index resulting from a factor analysis of various household characteristics durables and household heads education an advantage of this measure is that for intertemporal and intraregional comparisons we need not rely on suspect price deflators and currency conversion factors the wide availability and similarity of questionnaires of the dhs facilitate comparisons over both time and countries our results generally show declines in poverty during the previous decade largely due to improvements in rural areas

estimating top income and wealth shares sensitivity to data and methods abstract administrative income tax data indicate that u s top income and wealth shares are both substantial and larger than shares observed in household surveys however these estimates are sensitive to the unit of analysis the income concept measured in tax records and in the case of wealth to assumptions about the correlation between income and wealth we constrain a household survey the survey of consumer finances to be conceptually comparable to tax records and are able to reconcile the much of the difference between the survey and administrative estimates wealth estimates from administrative income tax data are sensitive to model parameters

tax policy and income inequality in the united states 1979 2007 this paper assesses the effects of u s tax policy reforms on inequality over around three decades from 1979 to 2007 it applies a new method for decomposing changes in government redistribution into 1 a direct policy effect resulting from policy changes and 2 the effects of changing market incomes over the period as a whole the tax policy changes increased income inequality by pushing up the income share of high income earners the top 20 jel h23 h31 h53 p16

asymptotic and bootstrap inference for top income shares we analyse statistical inference for top income shares in finite samples the asymptotic inference performs poorly even in large samples the standard bootstrap tests give some improvement but can be unreliable the semi parametric bootstrap approach is accurate in moderate and larger samples

should renewable energy policy be renewable political flexibility brings about trade offs for policy makers aiming to support the deployment of renewable energy sources res on the one hand it allows incorporating new information on ex ante uncertain benefits and costs of res policy on the other hand it may deter res investments this paper scrutinizes how these trade offs play out economically and politically when res policy makers choose the degree of flexibility as well as the instruments to implement flexibility the analysis builds on a theoretical framework distinguishing between flexibility by design and by adjustment it is complemented by a discussion of three case studies res support schemes in germany and the united kingdom and the eu emissions trading scheme theoretical as well as empirical results suggest that the politically chosen degree of flexibility by policy design may be sub optimally low in contrast flexibility by policy adjustment is often excessively high

levels and trends in u s income and its distribution a crosswalk from market income towards a comprehensive haig simons income approach recent research on u s levels and trends in income inequality varies substantially based on how these studies measure income we crosswalk move between standards from a market income of tax units to a more comprehensive measure of income including realized capital gains of households using a unified data set and replicate common findings in the literature by using a comprehensive income definition in the spirit of haig simons considering yearly accrued capital gains rather than focusing on the delayed reporting of capital gains that appear in internal revenue service tax return data the observed growth in income inequality and top income shares since 1989 is dramatically reduced

trouble in the tails what we know about earnings nonresponse thirty years after lillard smith and welch earnings nonresponse in household surveys is widespread yet there is limited knowledge of how nonresponse biases earnings measures we examine the consequences of nonresponse on earnings gaps and

multidimensional affluence theory and applications to germany and the us this article suggests multidimensional affluence measures for the top of the distribution in contrast to commonly used top income shares they allow the analysis of the extent intensity and breadth of affluence in several dimensions within a common framework we illustrate this by analysing the role of income and wealth as dimensions of multidimensional well being in germany and the us in 2007 as well as for the us over the period 1989 2007 we find distinct country differences with the country ranking depending on the measure while in germany wealth predominantly contributes to the intensity of affluence income is more important in the us

the trend and the measurement of world inequality over extended periods of accounting abstract the principal result of this paper is the demonstration of a method for measuring an index of e g nominal gnp over extended periods of time and the inequality thereof snap shot inequality for specific points in 1964 1972 and 1980 is also reported and decomposed for six subgroups in 122 countries

pareto models top incomes and recent trends in uk income inequality i determine uk income inequality levels and trends by combining inequality estimates from tax return data for the rich and household survey data for the non rich taking advantage of the better coverage of top incomes in tax return data which i demonstrate and creating income variables in the survey data with the same definitions as in the tax data to enhance comparability for top income recipients i estimate inequality and mean income by fitting pareto models to the tax data examining specification issues in depth notably whether to use pareto i or pareto ii generalized pareto models and the choice of income threshold above which the pareto models apply the preferred specification is a pareto ii model with a threshold set at the 99th or 95th percentile depending on year conclusions about aggregate uk inequality trends since the mid 1990s are robust to the way in which tax data are employed the gini coefficient for individual gross income rose by around 7 or 8 between 1996 7 and 2007 8 with most of the increase occurring after 2003 4 the corresponding estimate based wholly on the survey data is around 5

income inequality and the labour market in britain and the us abstract we study household income inequality in both great britain and the united states and the interplay between labour market earnings and the tax system while both britain and the us have witnessed secular increases in 90 10 male earnings inequality over the last three decades this measure of inequality in net family income has declined in britain while it has risen in the us to better understand these comparisons we examine the interaction between labour market earnings in the family assortative mating the tax and welfare benefit system and household income inequality we find that both countries have witnessed sizeable changes in employment which have primarily occurred on the extensive margin in the us and on the intensive margin in britain increases in the generosity of the welfare system in britain played a key role in equalizing net income growth across the wage distribution whereas the relatively weak safety net available to non workers in the us mean this growing group has seen particularly adverse developments in their net incomes

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

second best energy policies for heterogeneous firms this paper investigates second best issues in the regulation of external costs of energy use by heterogeneous firms the efficiency of regulatory energy policies depends in general on the policy incentives given for both output reduction and input substitution the resulting endogeneity of firms supply functions appears to lead to complicated policy rules in contrast to earlier efforts the analysis considers an arbitrarily large number of non identical price taking firms in a joint market a large variety of possible production functions including varying levels of economies of scale and possibilities for input substitution and elasticities of market demand which may vary from completely elastic to completely inelastic two second best instruments are considered namely output taxes and energy efficiency standards and are compared to the benchmark of first best energy taxes the underlying market factors determining the relative efficiency of these second best instruments when used optimally are identified

ranking income distributions a large variety of policy questions involve choices between social states and a consequent ordering of the feasible alternatives when these social states are related to the levels of welfare experienced by individuals or households two central issues stand out in determining the relative desirability of different social outcomes one of these is the essentially positive exercise of achieving comparability between households with different characteristics such as composition or preferences operating in different environments for example facing different price structures the other concerns the normative judgments implicit in the evaluation of alternative allocations of resourcesthe emphasis placed on inequality between households and the extent to which greater inequality can be compensated by higher average living standards this paper focuses on the second of these issues and in doing so we abstract from the problem of household comparability by considering a population of n households identical in all respects except for their incomes the question of ordering social states then becomes one of ranking income distributions over a group of anonymous households or individuals borrowing the usual assumptions imposed on consumer preferences we may suppose that a social ordering of income distributions can be represented by a welfare function 2

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

inequality in indonesia what can we learn from top incomes abstract using taxation and household survey data this paper estimates top income shares for indonesia during 1920 2004 our results suggest that top income shares grew during the 1920s and 1930s but fell in the post war era we observe a sharp rise in top income shares during the late 1990s coinciding with the 1997 98 economic crisis where comparable data are available top income shares in indonesia are generally higher than in other countries a finding that is at odds with the view that indonesia is a relatively egalitarian society this suggests that top income shares may provide a more complete picture of developing country inequality in comparative perspective

income inequality in the united states 1913 1998 this paper presents new homogeneous series on top shares of income and wages from 1913 to 1998 in the united states using individual tax returns data top income and wages shares display a u shaped pattern over the century our series suggest that the large shocks that capital owners experienced during the great depression and world war ii have had a permanent effect on top capital incomes we argue that steep progressive income and estate taxation may have prevented large fortunes from fully recovering from these shocks top wage shares were flat before world war ii dropped precipitously during the war and did not start to recover before the late 1960s but are now higher than before world war ii as a result the working rich have replaced the rentiers at the top of the income distribution

incentives to diffuse advanced abatement technology under environmental liability law polluting firms with advanced abatement technology at their disposal have incentives or disincentives to share this technology with other polluting firms the direction and extent of those incentives depends on the liability rule applicable and the way technical change impacts marginal abatement costs we establish that incentives for diffusion are socially optimal under strict liability and socially suboptimal under negligence if technical change lowers marginal abatement costs for all levels of abatement negligence may however induce better diffusion incentives than strict liability if technical change decreases increases marginal abatement costs for low high levels of abatement

learning about environmental damage implications for emissions trading in this paper the impact of adjusting the supply of tradeable emission permits on incentives for cleaner technology adoption is examined two policy rules for adjusting the supply of permits are considered open market operations and a proportional adjustment rule under which the regulator expropriates permits from individual firms in proportion to their existing permit holdings adjustment via open market operations is neutral with respect to cleaner technology investment decisions but may be politically difficult to implement the proportional adjustment rule is also neutral with respect to investment decisions and at the same time allows more flexibility from a political perspective

technical change and the marginal cost of abatement abstract we address one aspect of the treatment of technical change in the environmental economics literature how technical change impacts the marginal cost of abatement we review a selection of papers that employ a variety of representations of technical change and show that these representations have quite different and sometimes surprising effects on the marginal costs of pollution reductions we argue that these varied representations in fact correspond to a variety of different technology options we then present results indicating that this representation matters the impacts of technical change on the marginal cost of abatement can crucially impact policy analysis

the return of patrimonial capitalism a review of thomas piketty s capital in the twenty first century capital in the twenty first century by thomas piketty provides a unified theory of the functioning of the capitalist economy by linking theories of economic growth and functional and personal income distributions it argues based on the long run historical data series that the forces of economic divergence including rising income inequality tend to dominate in capitalism it regards the twentieth century as an exception to this rule and proposes policies that would make capitalism sustainable in the twenty first century jel d31 d33 e25 n10 n30 p16

effects of policies on patenting in wind power technologies abstract this paper explores the effects of policies and other factors driving innovation in wind power technologies in twelve oecd countries over more than two decades patent counts are used as an indicator for innovation the factors considered are generally derived from the systems of innovation literature count data econometric model were used for the estimations the suggest that patenting in wind power technology is positively related to public r d in wind power reflecting supply side policy the stock of wind capacity reflecting learning effects the number of patents per capita reflecting a country s innovative capacity and the share of green party voters reflecting the legitimacy of the technology in particular the presence of production or capacity targets for wind power or renewable energy sources and a stable policy environment reflecting policy process appear to be favourable for patenting wind power technologies these results are robust to various model specifications distributional assumptions and alternative classifications of wind power technologies in the patent search

partial multidimensional inequality orderings abstract the paper investigates how comparisons of multivariate inequality can be made robust to varying the intensity of focus on the share of the population that are more relatively deprived it is in the spirit of sen 1970 s partial orderings and follows the dominance approach to making inequality comparisons by focusing on those below a multidimensional inequality frontier we are able to reconcile the literature on multivariate relative poverty and multivariate inequality some existing approaches to multivariate inequality actually reduce the distributional analysis to a univariate problem either by using a utility function first to aggregate an individual s multiple dimensions of well being or by applying a univariate inequality analysis to each dimension independently one of our innovations is that unlike previous approaches the distribution of relative well being in one dimension is allowed to affect how other dimensions influence overall inequality our methods are also robust to choices of individual utility or aggregation functions we apply our approach to data from india and mexico to show inter alia how dependence between dimensions of well being can influence relative poverty and inequality comparisons between two populations

recent trends in the size distribution of household wealth based on the survey of consumer finances the distribution of wealth in the united states became much more unequal in the 1980s and that trend continued albeit at a slower pace in the 1990s the only households that saw their mean net worth rise in absolute terms between 1983 and 1995 were those in the top 20 percent and the gains were particularly strong for the top one percent all other groups were particularly strong for the top one percent all other groups suffered real wealth losses including the median household and declines were particularly precipitous at the bottom racial disparities widened and young households also lost out over this period

levels and long term trends in earnings inequality overcoming current population survey censoring problems using the gb2 distribution over its history the march current population survey cps has increasingly captured the upper tail of the distribution of all sources of income this together with time consistency problems in top coding means that users of both the public use and restricted access cps will understate the level of wage earnings and income inequality in earlier years and overstate their growth over time we address this problem by modeling the personal earnings of full time full year workers using the generalized beta distribution of the second kind calculating gini coefficients from the estimated parameters and comparing them with past findings

biodiversity and optimal policies towards r d and the growth of genetically modified crops in this paper we provide a simple model illustrating the possible nature ofgovernment policy with regards to genetic modification taking into accountits impact on the environment we show that it is necessary not only tointervene in the growing of crops but also to intervene in r d througha tax on the adoption of new gm technology without intervention at bothlevels both the cultivation of gm crops and the rate of innovation in gm willexceed their socially optimal levels

promise and pitfalls in the use of secondary data sets income inequality in oecd countries as a case study this paper examines the role of secondary data sets in empirical economic research taking the field of income distribution as a case study we illustrate problems faced by users of secondary statistics showing how both cross country comparisons and time series analysis can depend sensitively on the choice of data after describing the genealogy of secondary data sets on income inequality we consider the main methodological issues and discuss their implications for comparisons of income inequality across oecd countries and over time the lessons to be drawn for the construction and use of secondary data sets are summarized at the end of the paper

investment in risky r d programs in the face of climate uncertainty we analyze how the socially optimal technology rd and that uncertainty in damages interacts with uncertainty in the returns to rd and r d that reduces the emissions to output ratio and argue that this is a good representation of r d into fossil fuel technologies for r d programs into non carbon technologies optimal investment is higher in riskier programs our empirical model indicates that the optimal investment in a risky program is about 3 1 2 times larger than in a program with certain returns for r d programs aimed at reducing emissions in fossil fuel based technologies our results show that qualitatively investment is higher in less risky programs under most uncertain damage scenarios our empirical model shows however that the risk profile of fossil fuel based r d programs generally has little quantitative impact on optimal investment the exception is that when the probability of a catastrophe inducing full abatement is very high investment is about twice as high in risky programs compared to programs with certain returns

clean technology innovation and environmental regulation the development and diffusion of clean technologies has an important role to play in preventing pollution government must address the issue of how firms can be given the necessary incentive to develop environmentally sound production techniques and products this paper focus on how subsidies can under certain restrictive conditions stimulate innovation subsidization is usually assumed to involve unit subsidies for pollution reduction unit subsidies have little to do with the subsidy schemes in actual use our focus is on subsidy schemes specifically designed to promote the development of clean technologies through the use of grants financial aid based on data from the development projects initiated through the danish clean technology programme we analyze how environmental innovations take place when the polluters their suppliers and consultants are actively engaged in the development processes the main merit of subsidy schemes like the danish one is its direct focus on the innovation processes and the active incorporation of the network of firms surrounding the polluters our findings lead us to conclude that when it comes to subsidization the role of government should be redefined government can act as a matchmaker by providing firms with informative incentives and necessary contacts for finding more efficient technological solutions to specific environmental problems

what do normative indices of multidimensional inequality really measure we argue that normative indices of multidimensional inequality do not only measure a distribution s extent of inequity i e the gaps between the better off and the worse off but also its extent of inefficiency i e the non realized mutually beneficial exchanges of goods we provide a decomposition that allows quantifying these two parts of inequality exact formulas of the inequity and inefficiency components are provided for a generic class of social welfare functions the inequity component turns out to be a two stage measure which applies a unidimensional inequality measure to the vector of well being levels we critically discuss two prominent transfer principles viz uniform majorization and correlation increasing majorization in the light of the decomposition a decomposition of inequality in human development illustrates the analysis

top incomes in the long run of history a recent literature has constructed top income shares time series over the long run for more than twenty countries using income tax statistics top incomes represent a small share of the population but a very significant share of total income and total taxes paid hence aggregate economic growth per capita and gini inequality indexes are sensitive to excluding or including top incomes we discuss the estimation methods and issues that arise when constructing top income share series including income definition and comparability over time and across countries tax avoidance and tax evasion we provide a summary of the key empirical findings most countries experience a dramatic drop in top income shares in the first part of the twentieth century in general due to shocks to top capital incomes during the wars and depression shocks top income shares do not recover in the immediate postwar decades however over the last thirty years top income shares have increased substantially in english speaking countries and in india and china but not in continental european countries or japan this increase is due in part to an unprecedented surge in top wage incomes as a result wage income comprises a larger fraction of top incomes than in the past finally we discuss the theoretical and empirical models that have been proposed to account for the facts and the main questions that remain open

robust multidimensional poverty comparisons we demonstrate how to make poverty comparisons using multidimensional indicators of well being showing in particular how to check whether the comparisons are robust to aggregation procedures and to the choice of multidimensional poverty lines in contrast to earlier work our methodology applies equally well to what can be defined as union intersection or intermediate approaches to dealing with multidimensional indicators of well being to make this procedure of some practical usefulness the paper also derives the sampling distribution of various multidimensional poverty estimators including estimators of the critical poverty frontiers outside which multidimensional poverty comparisons can no longer be deemed ethically robust the results are illustrated using data from a number of developing countries

what s the monetary value of distributive justice this paper proposes a model that can be implemented to estimate the willingness to pay for distributive justice defined as distribution according to desert we derive a formula that allows one to recover the willingness to pay for distributive justice from fiscal data and the estimated coefficients of a probit regression using this formula and data from a 1998 gallup social audit we find that on average the monetary value of justice for us households amounts to about one fifth of their disposable income moreover we find evidence of markedly heterogeneous preferences for justice along the lines of race and education

heterogeneous preferences and in kind redistribution theory and evidence abstract this paper examines the impact of social heterogeneity on in kind redistribution we contribute to the previous literature in two ways we consider i the provision of several public goods and ii agents different not only in income but also in their preferences over the various goods provided by the public sector in this setting both the distribution and size of goods provision depend on the heterogeneity of preferences our main result is that preference heterogeneity tends to decrease in kind redistribution while income inequality tends to increase it an empirical investigation based on united states census bureau data confirms these theoretical findings

inequality and poverty in united states the effects of rising dispersion of men s earnings and changing family behaviour using semiparametric density estimation techniques we analyse the effect of rising dispersion of men s earnings and related changes in family behaviour on increasing inequality in the distribution of family income in the united states for the period 1969 1989 the growing dispersion of men s earnings and changing family structure can account for most of the rise in family income inequality by contrast the increase in labour force participation by women offset this trend inequality grew at a slower rate in the 1990s than in earlier decades largely because of stabilization in the relative earnings of men from low income families

what happens when you tax the rich evidence from executive compensation this paper examines the responsiveness of taxable income to changes in marginal tax rates using detailed compensation data on several thousand corporate executives from 1991 to 1995 the data confirm that the higher marginal rates of 1993 led to a significant decline in taxable income indeed this small group of executives may account for as much as 20 percent of the aggregate change in wage and salary income for approximately the one million richest taxpayers over this time period one person alone can account for more than 2 percent the decline however is almost entirely a short run shift in the timing of compensation rather than a permanent reduction in taxable income the short run elasticity of taxable income with respect to the net of tax share exceeds one in this sample but the elasticity after one year is at most 0 4 and probably closer to zero breaking out the tax responsiveness of different types of compensation shows that the large short run responses come almost entirely from a large inc

efficiency in pollution control in the short and long runs a system of rental emission permits efficiency in pollution control in the short and long runs a system of rental emission permits author s robert a collinge and wallace e oates source the canadian journal of economics revue canadienne d economique vol 15 no 2 may 1982 pp 346 354 published by blackwell publishing on behalf of the canadian economics association stable url http www jstor org stable 134787 accessed 05 05 2008 21 07

a regulatory framework for a policy of sustainability lessons from the neo liberal school abstract in this paper targets institutions and policy measures for describing and implementing sustainable development are evaluated in terms of their conformity with the economic framework of a market system from the viewpoint of neo liberal economic thinking as conceived by the german freiburg school of economists a general set of criteria is developed it includes issues of operationalization and legitimation of goals as well as institutional and instrumental issues on this basis general rules for designing an ecological framework guaranteeing the greatest possible degree of conformity with a market system are derived the concrete application of these rules leads to recommendations for a policy of sustainability with respect to the setting of goals the establishment of institutions as well as the use of appropriate instruments

optimal pollution standards and non compliance in a dynamic framework in this paper we present a stackelberg differential game to study the dynamic interaction between a polluting firm and a regulator who sets pollution limits overtime at each time the firm settles emissions taking into account the fine for non compliance with the pollution limit and balances current costs of investments in a capital stock which allows for future emission reductions we derive two main results first we show that the optimal pollution limit decreases as the capital stock increases while both emissions and the level of non compliance decrease second we find that offering fine discounts in exchange for firm s capital investment is socially desirable we numerically obtain the optimal value of such discount which crucially depends on the severity of the fine in the limiting scenario with a very large severity of the fine the optimal discount implies that no penalties are levied since the firm shows adequate adaptation progress through capital investment

how closely do top income shares track other measures of inequality in recent years researchers have used taxation statistics to estimate the share of total income held by the richest groups such as the top 10 or the top 1 compiling a standardised top income shares dataset for 13 developed countries i find that there is a strong and significant relationship between top income shares and broader inequality measures such as the gini coefficient this suggests that panel data on top income shares may be a useful substitute for other measures of inequality over periods when alternative income distribution measures are of low quality or unavailable

innovation in pollution control comparisons of the various institutional arrangements for controlling pollutant emissions from individual sources effluent fees effluent control subsidies marketable permits and direct command and control regulation have usually focused on their static efficiency properties and institutional feasibility e g dales 1968 zerbe 1970 baumol and oates 1975 kneese and schultze 1975 marin 1978 mills and white 1978 spence and weitzman 1978 russell 1979 a relatively neglected area has been the study of how each arrangement influences innovation in pollution control a few studies e g kneese and schultze 1975 marin 1978 mills and white 1978 russell 1979 have casually claimed that the control methods that rely on economic incentives provide superior incentives for innovation but there have been few systematic studies of the question this paper provides a simple model of pollution control innovation by a profitmaximizing polluter who is subject to the various control methods the consequences of the methods will be explored in three major contexts first we assume that the polluter and the innovation is a small enough part of the overall pollution problem so that none of the important marginal conditions are changed by the innovation second we assume that the polluter and the innovation are important enough so that marginal conditions are changed by the innovations but that the governmental authority determining pollution control incentives or levels fails to make the appropriate adjustments third we again assume that the innovation causes marginal conditions to change but in this case the governmental authority makes the appropriate adjustments we use the term ratcheting to describe this last phenomenon in all cases we assume that the innovating polluter correctly predicts the reactions of the governmental authority and bases his innovation decisions on that prediction a profit maximizing entrepreneur would normally be expected to adopt any innovation that promised gains present discounted value to him in excess of initial

taxes fringe benefits and faculty the growth of employee benefits in academe has closely paralleled their economy wide growth this study estimates a complete system describing the demand for benefits and wages using panel data on 1477 institutions of higher learning the demand for benefits is very responsive to changes in real income and the tax price of benefits these conclusions are robust with respect to varying definitions of the tax price treating it as endogenous and accounting for unmeasured individual effects on demand simulations suggest that the tax reform act of 1986 sharply reduced the demand for benefits extrapolating the impact to the entire economy the annual flow of compensation shifted away from benefits by at least 15 billion copyright 1992 by mit press

robust multidimensional spatial poverty comparisons in ghana madagascar and uganda spatial poverty comparisons are investigated in three african countries using multidimensional indicators of well being the work is analogous to the univariate stochastic dominance literature in that it seeks poverty orderings that are robust to the choice of multidimensional poverty lines and indices in addition the study seeks to ensure that the comparisons are robust to aggregation procedures for multiple welfare variables in contrast to earlier work the methodology applies equally well to what can be defined as union intersection and intermediate approaches to dealing with multidimensional indicators of well being furthermore unlike much of the stochastic dominance literature this work computes the sampling distributions of the poverty estimators to perform statistical tests of the difference in poverty measures the methods are applied to two measures of well being the log of household expenditures per capita and children s height forage z scores using data from the 1988 ghana living standards study survey the 1993 national household survey in madagascar and the 1999 national household survey in uganda bivariate poverty comparisons are at odds with univariate comparisons in several interesting ways most important it cannot always be concluded that poverty is lower in urban areas in one region compared with that in rural areas in another even though univariate comparisons based on household expenditures per capita almost always lead to that conclusion

global income distribution from the fall of the berlin wall to the great recession we present an improved panel database of national household surveys between 1988 and 2008 in 2008 the global gini index is around 70 5 having declined by approximately 2 gini points china graduated from the bottom ranks changing a twin peaked global income distribution to a single peaked one and creating an important global median class 90 of the fastest growing country deciles are from asia while almost 90 of the worst performers are from mature economies another winner was the global top 1 hence the global growth incidence curve has a distinct supine s shape with gains highest around the median and top

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

using the pareto distribution to improve estimates of topcoded earnings i introduction the public use march current population survey cps is the primary source of data for tracking levels and trends in u s labor earnings and for understanding the factors which influence these trends literatures that have used cps earnings data are vast and include research on the changing returns to education or college major in the labor market autor 2014 gemici and wiswall 2014 earnings differentials across occupations glied ma and pearlstein 2015 earnings volatility hardy and ziliak 2014 elasticity of taxable income burns and ziliak forthcoming and more generally the causes of changes in wage structures and earnings inequality see e g autor katz and kearney 2008 card and dinardo 2002 goldin and katz 2007 juhn murphy and pierce 1993 acemoglu 2002 altonji and blank 1999 and katz and autor 1999 provide reviews of this literature however these literatures that use the public use cps data have been hampered by an attenuated view of the right tail of the labor earnings distribution due to the topcoding of high earnings in the public use cps data 1 importantly the failure to properly correct for inconsistent topcoding has been found to result in biased estimates for a range of outcomes including returns to education hubbard 2011 the size of the earnings gaps between gender and race groups burkhauser and larrimore 2009a the relative economic resources of individuals with and without disabilities burkhauser and larrimore 2009b and population level income inequality burkhauser et al 2012 to correct for topcoding biases public use cps based researchers have generally pursued one of four paths 1 ignoring the topcoding problem 2 making an ad hoc adjustment to topcoded earnings values 3 using a pareto distribution to estimate earnings at the top of the distribution or 4 using cell means or rank proximity swapped data that is based on the still censored internal cps data for example a common ad hoc technique based on estimates from pareto imputations of top earnings is to replace topcoded earnings with a multiple of the topcode threshold so all individuals with topcoded earnings in a year are assumed to have earnings at 1 3 1 4 or 1 5 times the topcode threshold autor katz and kearney 2008 juhn murphy and pierce 1993 katz and murphy 1992 lemieux 2006 however such an approach may misstate top earnings if the wrong multiple is used or if the appropriate multiple changes over time similarly researchers using a pareto imputation of top earnings may misstate those earnings if they are unable to obtain a reasonable fit for the pareto distribution when using available public use data making use of internal march cps files with their much higher censoring levels we show that previous ad hoc estimates and pareto estimations of top earnings based on public use data understate mean earnings at the top of the earnings distribution and hence also understate earnings inequality however as this internal data are also censored albeit at higher levels any results based purely on the internal data will also fail to capture a portion of the income at the very top of the distribution and therefore will also understate inequality hence while cell means based on internal data such as those produced by larrimore et al 2008 and the rank proximity swapped data series which the census began providing in 2010 each allow researchers to replicate results from the internal census data findings using these series will be subject to the same limitations and understatement of true top incomes as the internal values recognizing the limitations of the existing options to correct for topcoding we proceed by using a continuous maximum likelihood estimator along with internal cps data to produce a series of more accurate estimates of top earnings in the cps data our estimates start with actual top earnings from the internal cps combined with a pareto estimate using these data for internally censored observations

pareto and the upper tail of the income distribution in the uk 1799 to the present the pareto distribution has long been a source of fascination to economists and the pareto coefficient is widely used in theoretical and empirical studies as a summary of the degree of concentration of top incomes this paper examines the empirical evidence from income tax data concerning top incomes in the uk contrasting the dramatic changes that took place in the twentieth century after 1918 with the much more modest changes in the preceding nineteenth century probing beneath the surface the paper identifies a number of features of the evolution of the uk income inequality that warrant closer attention these include the changing shape of the upper tail where there is a link with pareto s theory of elites the need for a richer functional form to describe top incomes and the limited evidence at the top of the distribution for a kuznets curve in nineteenth century britain

truncation bias and the measurement of income inequality 1988 truncation bias and the measurement of income inequality journal of business economic statistics vol 6 no 3 pp 335 337

truncation bias and the ordinal evaiuation of income inequality lorenz dominance analysis is used to examine the effect of top coding on the ordinal evaluation of u s income inequality across time current population survey microdata are adjusted for truncation bias and statistical inference procedures are used to examine biennial changes in unadjusted and adjusted lorenz curves beginning in 1985 the truncation bias has a significant effect on ordinal rankings of income inequality

pollution accumulation and firm incentives to accelerate technological change under uncertain private benefits the paper explores the relationships between the design of public incentives and the policy maker s desired timing of abandonment of a polluting technology when this requires an irreversible private investment and the firm faces uncertain appropriable benefits from the technological change two regulatory approaches are examined firstly we consider the quite common one of lowering the private investment cost through a subsidy in order to bridge the gap between the private and the policy maker s desired timing of environmental innovation secondly we consider a policy scenario where the regulator instead of simply lowering the investment s rental price also stimulates abandonment of the polluting technology by reducing through appropriate announcements the uncertainty surrounding the technological switch s private profitability we then compare the two approaches and show the latter s benefits in terms of the policy s effectiveness and or budgetary savings

deconstructing income and income inequality measures a crosswalk from market income to comprehensive income recent research on levels and trends in the united states in income inequality vary substantially in how they measure income we show the sensitivity of alternative income measures in capturing income trends using a unified data set focusing solely on market income or including realized taxable capital gains based on irs tax return data in more comprehensive household income measures will dramatically increase inequality growth compared to capital gains measures more in keeping with haig simons principles using a measure of yearly accrued capital gains dramatically reduces observed growth in income inequality across the distribution but also equalizes income growth since 1989