a uk carbon energy tax a carbon energy tax has been proposed by the european commission to start as us 3 per barrel oil equivalent in 1993 rising to us 10 in 2000 the effects of this tax on the uk economy can be assessed by using a large scale energy environment economy model in which energy demand is treated by means of aggregate equations for energy users and fuel share equations for electricity and each of the main fossil fuels the electricity supply industry is represented in the model by simulating the characteristics of each existing generating station and of a range of new station types and by allowing the model to choose the fuels used from relative fuel prices and prices of capital inputs this approach contrasts with the multimodel approach used in most studies of the effects of the tax the tax is introduced as a tax on imports and domestic output of fossil fuels in proportion to their carbon and energy content with the tax being passed on through the economic system depending on the use of the fuels thus the electricity industry is faced with higher prices for coal gas and fuel oil and chooses to burn the different fuels according to their relative prices four scenarios are developed which vary according to the way the tax revenues are recycled through reductions in vat or in income tax rates and whether the tax is introduced throughout the european community or throughout the oecd if the tax is european it is assumed that the energy intensive industries will be exempt the outcome is that the tax is sufficient to stabilize co2 emissions over the period 1990 2005 at 12 below base levels by the end of the period there is an overall saving of energy compared to base and a further switch to gas in electricity generation the effects on the macroeconomy are rather small and as the revenues are recycled rather than saved by the government gdp growth is likely to increase under the tax by some 0 2 above base this confirms other studies in which revenues are recycled but contradicts many results from studies in which revenue recycling is ignored or incomplete the effects on the energy intensive industries are expected to be small in all the scenarios but 14 of tax revenues are lost if the industries are exempt

production and welfare progress in economic measurement while the gdp was intended by its originators as a measure of production the absence of a measure of welfare in the national accounts has led to widespread misuse of the gdp to proxy welfare measures of welfare are needed to appraise the outcomes of changes in economic policies and evaluate the results concepts that describe the income distribution such as poverty and inequality fall within the scope of welfare rather than production this paper reviews recent advances in the measurement of production and welfare within the national accounts primarily in the united states and the international organizations expanding the framework beyond the national accounts has led to important innovations in the measurement of both production and welfare

changes over time in multidimensional poverty methodology and results for 34 countries summary this paper sets out a systemic account of intertemporal changes in multidimensional poverty using the alkire foster adjusted headcount ratio and its consistent sub indices it uses three techniques to assess the pro poorness of multidimensional poverty reduction the analysis of changes in multidimensional poverty draws on the global multidimensional poverty index mpi and related destitution measure in 34 countries and 338 sub national regions covering 2 5 billion people for which there is a recent mpi estimation and comparable demographic and health survey dhs dataset across time first it assesses overall changes in poverty and its incidence and intensity and compares this with changes in 1 90 poverty next utilizing the property of subgroup decomposability it examines changes in the mpi and its consistent sub indices over time across urban rural regions sub national regions and ethnic groups the decomposition analysis identifies relevant national patterns including those in which the pace of poverty reduction is higher for the poorest subgroups finally the paper analyzes the dynamics of a strict subset of the poor who are identified as destitute using a more extreme deprivation cutoff vector and studies relative rates of reduction of destitution and poverty by country and region this extensive empirical analysis illustrates how to assess the extent and patterns of reduction of multidimensional poverty as well as whether it is inclusive or whether some people or groups are left behind naturally some further research questions emerge

the effects of welfare and tax reform the material well being of single mothers in the 1980s and 1990s abstract the tax and welfare programs that provide income and in kind benefits to single mothers have changed dramatically in recent years these changes began as far back as the mid 1980s and culminated with the 1996 welfare law that ended welfare as we knew it these tax and welfare changes have sharply increased the employment of single mothers and cut welfare rolls however little is know about the effects of these policy changes on the material well being of single mothers and their children studies of those leaving welfare have found that a substantial percentage have problems paying rent purchasing enough food and paying utility bills other studies found a decline in income among the worst off single mothers after 1994 or 1995 the goal of this paper is to examine the material well being of single mothers and their families before and after recent welfare and tax reforms using data from two nationally representative household surveys we examine the consumption patterns of single mothers and their families from 1984 2000 we find that the material conditions of single mothers did not decline in recent years either in absolute terms or relative to single childless women or married mothers this pattern holds for the average single mother as well as for low educated single mothers at both the 15th and 25th percentiles of the consumption distribution in most cases our evidence suggests that the material conditions of single mothers have improved slightly

indexing government programs for changes in the cost of living this article presents social cost of living indexes constructed from an econometric model of aggregate consumer behavior the econometric price index has the same average inflation rate as a tornqvist price index over the period 1947 1995 but rises less rapidly after 1973 group cost of living indexes are presented for white and nonwhite male and female headed and elderly and nonelderly households elderly households have experienced a slightly higher rate of inflation than the nonelderly since 1980 we recommend indexing government programs such as social security by social and group cost of living indexes rather that the consumer price index

prices and regional variation in welfare one would expect regional differences in prices to influence conclusions concerning levels and distributions of well being although there is anecdotal evidence of significant price dispersion across regions there is no governmental source of data that measures differences in price levels in this paper i integrate estimates of regional prices with expenditure data from the consumer expenditure surveys to assess the influence of price differences on living standards in the united states while prices have little effect on inequality estimates of poverty and the standard of living change substantially with the inclusion of regional price variation

chronic poverty in the united states this paper proposes a method of measuring chronic and transitory poverty using an axiomatically sound additively decomposable index of aggregate poverty our approach is contrasted with alternative methods of measuring poverty persistence we use our method to measure chronic and transitory poverty in the united states during the 1980s and late 1970s and find that chronic poverty is a more serious problem than previously thought between the late 1970s and mid 1980s poverty not only increased it became more chronic and less transitory in nature this is true for the population as a whole and for some but not all of the subpopulations we considered the latter were defined according to race type of social unit and educational qualifications of the head of the social unit all empirical analyses are based on data from the panel study of income dynamics

why are households that report the lowest incomes so well off we document that households in the uk with extremely low measured income tend to spend much more than those with merely moderately low income this phenomenon is evident throughout three decades worth of microdata and across different employment states levels of education and marital statuses of the likely explanations we provide several arguments that discount over reporting of expenditure and argue that under reporting of income plays the major role in particular by using a dynamic model of consumption and saving and paying special attention to poverty dynamics we show that consumption smoothing cannot explain all the apparent dissaving

the proposals for a european tax on co2 and their implications for intercountry distribution this paper analyzes the advantages andimplications of the implementation of aeuropean tax on carbon dioxide emissions as anown resource of the eu and it focuses on itseffects on intercountry distribution incontrast to a harmonized tax which would onlyhave distributive effects within each memberstate a tax collected at european scale wouldalso have important distributive effects amongdifferent countries these effects would alsodepend on the use of tax revenues the paperinvestigates through a simple empiricalanalysis the distributive effects among themember states of three tax models a pureco2 model a 50 50 energy co2model and a co2 model with a burden onnuclear power

on measuring child costs with applications to poor countries the theoretical basis for measuring child costs is discussed and detailed consideration is given to two straightforward procedures for calculation engel s food share method and rothbarth s adult good method each of these methods embodies different definitions of child costs so that the same empirical evidence can generate quite different estimates depending on the method used it is shown that true costs are generally overstated by engel s method and understated by rothbarth s procedure although the latter unlike the former can provide a sensible starting point for cost measurement our estimates from sri lankan and indonesian data suggest that children cost their parents about 30 40 percent of what they spend on themselves

border carbon adjustments based on avoided emissions addressing the challenge of its design abstract carbon pricing is an essential instrument to address climate change however international differences in carbon control policies may cause not only carbon leakage but also competitiveness disadvantages in this context border carbon adjustments are a promising tool for discouraging these problems but designing a real world border carbon adjustment instrument implies to consider significant issues technical feasibility data availability the risk of retaliation from developing countries and its compatibility within the world trade organization legal framework there are still no conclusive answers about a proper design this paper is an attempt to address the above mentioned challenges proposing a carbon border tax cbt based on avoided emissions such a cbt is applied at a product level and not at a sector level and all international prices are deflated to guarantee that import like goods received a treatment similar to like domestic products using the wiod we simulate a cbt based on avoided emissions applied by the european union and we compare the results with a cbt based on embodied emissions

green taxes in a post paris world are millions of nays inevitable turning the paris agreement s greenhouse gas emissions pledges into domestic policies is the next challenge for governments we address the question of the acceptability of cost effective climate policy in a real voting setting first we analyze voting behavior in a large ballot on energy taxes rejected in switzerland in 2015 by more than 2 million people energy taxes were aimed at completely replacing the current value added tax we examine the determinants of voting and find that distributional and competitiveness concerns reduced the acceptability of energy taxes along with the perception of ineffectiveness most people would have preferred tax revenues to be allocated for environmental purposes second at the same time of the ballot we tested the acceptability of alternative designs of a carbon tax with a choice experiment survey on a representative sample of the swiss population survey respondents are informed about environmental distributional and competitiveness effects of each carbon tax design these impacts are estimated with a computable general equilibrium model this original setting generates a series of novel results providing information on the expected environmental effectiveness of carbon taxes reduces the demand for environmental earmarking making distributional effects salient generates an important demand for progressive designs e g social cushioning or recycling via lump sum transfers the case of lump sum recycling is particularly striking it is sufficient to show its desirable distributional properties to make it one of the most preferred designs which corresponds to a completely novel result in the literature we show that providing detailed information on the functioning of environmental taxes may contribute to close both the gap between acceptability ex ante and ex post and the gap between economists prescriptions and the preferences of the general public

measuring pro poor growth when relative prices shift abstract the theoretical literature on pro poor growth as well as its application has not paid sufficient attention to the issue of varying inflation rates across the income distribution ignoring inflation inequality in pro poor growth measurements can however severely bias assessments of pro poor growth hence we suggest simple methods which are able to redress such biases as an empirical illustration we use the case of burkina faso and the growth incidence curve and poverty change decompositions as pro poor growth measurements

identifying the disadvantaged official poverty consumption poverty and the new supplemental poverty measure few economic indicators are more closely watched or more important for ew economic indicators are more closely watched or more important for policy than the offi cial poverty rate it is used to gauge the extent of deprivapolicy than the offi cial poverty rate it is used to gauge the extent of deprivation in the united states and to determine how economic well being has tion in the united states and to determine how economic well being has changed over time the poverty rate is often cited by policymakers researchers changed over time the poverty rate is often cited by policymakers researchers and advocates who are evaluating social programs that account for more than half and advocates who are evaluating social programs that account for more than half a trillion dollars in government spending eligibility for some means tested transfer a trillion dollars in government spending eligibility for some means tested transfer programs is determined based on the poverty thresholds and local poverty rates programs is determined based on the poverty thresholds and local poverty rates affect the allocation of billions of dollars in federal funds affect the allocation of billions of dollars in federal funds the methods for calculating the current poverty measure largely unchanged the methods for calculating the current poverty measure largely unchanged since the 1960s have been criticized by many researchers in response the census since the 1960s have been criticized by many researchers in response the census bureau has led a two decade process of research and discussion of poverty measurebureau has led a two decade process of research and discussion of poverty measurement with an eye to revising the offi cial measure the process has involved hundreds ment with an eye to revising the offi cial measure the process has involved hundreds of papers dozens of offi cial census bureau publications u s census 2010 of papers dozens of offi cial census bureau publications u s census 2010 and two national academy of sciences reports citro and michael 1995 iceland and two national academy of sciences reports citro and michael 1995 iceland 2005 we will not summarize this vast literature here rather we will examine 2005 we will not summarize this vast literature here rather we will examine the properties of three measures of poverty the offi cial u s poverty rate the new the properties of three measures of poverty the offi cial u s poverty rate the new supplemental poverty measure fi rst released by the u s census bureau in fall 2011 supplemental poverty measure fi rst released by the u s census bureau in fall 2011 and a consumption based measure of poverty we will focus on two fundamental and a consumption based measure of poverty we will focus on two fundamental goals of these measures to identify the most disadvantaged and to assess changes goals of these measures to identify the most disadvantaged and to assess changes

viewpoint further results on measuring the well being of the poor using income and consumption we evaluate the relative merits of income and consumption based measures of well being our results provide evidence that consumption better captures well being for those with few resources the bottom deciles of expenditures exceed those of income suggesting under reporting of income the under reporting rate for government transfers is high and rising overall non response is more severe in u s income data than in expenditure data furthermore a consumption data set requires fewer observations than an income data set to obtain the same level of precision for typical estimates finally very low consumption is more strongly related to other bad outcomes than very low income on evalue les merites relatifs des mesures de bien etre fondees sur le revenu et la consommation les resultats montrent que la consommation mesure mieux le bien etre de ceux qui ont peu de ressources les deciles au bas de la distribution des depenses depassent les deciles de la distribution des revenus ce qui suggere qu il y aurait des revenus non rapportes le taux de sous declaration des transferts gouvernementaux est eleve et croissant le taux global de non reponses est plus important aux etats unis pour les revenus que pour les depenses de plus les bases de donnees sur la consommation requierent moins d observations que celles sur le revenu pour obtenir le meme degre de precision des evaluations typiques finalement une tres basse consommation est plus fortement co reliee a d autres mauvaises conditions qu un tres bas niveau de revenu

decentralization and efficiency of subsidy targeting evidence from chiefs in rural malawi abstract lower income countries spend vast sums on subsidies beneficiaries are typically selected via either a proxy means test pmt or through a decentralized identification process led by local leaders a decentralized allocation may offer informational advantages but may be prone to elite capture we study this trade off in the context of two large scale subsidy programs in malawi for agricultural inputs and food decentralized to traditional leaders chiefs who are asked to target the needy using household panel data we find that nepotism exists but has only limited mistargeting consequences importantly we find that chiefs target households with higher returns to farm inputs generating an allocation that is more productively efficient than what could be achieved through strict poverty targeting this could be welfare improving since within village redistribution is common productive efficiency targeting is concentrated in villages with above median levels of redistribution

uncertain medical expenses and precautionary saving near the end of the life cycle this paper introduces a dynamic structural model of household consumption decisions in which elderly families consider the effects of uncertain future medical expenses when deciding current levels of consumption the model with uncertain medical expenses implies a potentially important role for precautionary saving incentives to explain slow rates of dissaving among elderly americans during retirement rather than just simulating the stochastic dynamic model preference parameters are estimated using panel data on health wealth and expenditures for retired families the health uncertainty model predicts consumption levels closer to observed expenditures than a life cycle model with uncertain longevity however elderly families typically dissave their financial assets more slowly than even the baseline health uncertainty model predicts is optimal

more on the search for giffen goods in a recent paper in this journal gilley and karels 1991 we showed that observed behavior consistent with the giffen paradox can occur largely independent of the form of the utility function our model took the potatoes and meat fable of the irish potato famine literally we added a nutrition constraint to the consumer s utility maximization problem and found that with two binding constraints the consumer s feasible set contains a corner that leads to demand curves with upward sloping segments papers by johnston and larson 1994 and wichers 1994 in this issue extend and sharpen our knowledge of giffen goods the first paper builds on our model by extending the potential arenas where economists should look for evidence of giffen behavior the second paper raises some philosophical issues concerning the definition of giffen goods and the role of a second constraint in the utility maximizing problem these issues apply to both our paper and johnston and larson s johnston and larson employ a model that is essentially the same as ours except that the second binding constraint places an upper limit local satiation instead of a lower limit a minimum nutritional requirement on the optimization problem in the gilley karels model a giffen like good is obtained because the consumer s income is so limited as to preclude survival on the consumption of meat alone potatoes exhibit giffen characteristics because they are more efficient than meat at providing nutrition when the price of potatoes increases this nutritional efficiency causes consumers to purchase more potatoes to avoid violating the nutritional constraint johnston and larson obtain giffen like behavior in their model for very similar reasons as local satiation is obtained the least cost source of satiation drives the consumer s choice when the price of this good falls the consumer continues to be satiated and purchases less of the good that is more efficient in providing satiation johnston and larson interpret this local satiation as a type of time rationing problem arguing that there is an upper limit to the amount of food that a consumer can ingest in a short period this was essentially the mathematical problem addressed in earlier papers by goldfarb 1977 and wichers 1979 we were unaware of these papers and failed to cite them in our original paper what is interesting and important about johnston and larson s paper is that it provides another very plausible set of circumstances where giffen like behavior could be found one of the more interesting aspects of the giffen problem is the dearth of published empirical evidence supporting the existence of such goods dougan 1982 quite convincingly points out that little evidence would come from an analysis of market demand curves johnston and larson suggest however that a substantial body of econometric evidence on giffen goods exists in the agricultural economics literature several studies find evidence of a positive own price elasticity of demand more evidence is likely to exist but is not often published since the result is usually dismissed as an identification problem in the econometric study johnston and larson s interpretation of the consumer s maximization problem suggests we should not dismiss those studies so readily in fact their study provides experimental economists with a new set of conditions to test for evidence of giffen behavior the wichers comment has two important messages first the models gilley and karels 1991 and johnston and larson 1994 use to obtain giffen like behavior do not follow the standard hicksian single constraint optimization problem the giffen result obtained in traditional utility theory comes from a negative income effect that is sufficiently strong to override the substitution effect in the gilley karel and johnston larson models there is no substitution effect because of the binding second constraint the giffen like behavior is due exclusively to a negative income effect that results from the relative efficiency of a critical characteristic of the goods

poverty and inequality under income and price dispersions many policies simultaneously affect the distribution of prices and incomes in the economy moreover a bias may occur when there is a stochastic relationship between prices and incomes and this relationship is being ignored it is therefore important to dispose of an analytical framework for welfare analysis that could account for changes in this joint distribution how can the joint influences of price and income distributions on poverty and inequality indicators be analysed we offer a method to deal with this problem by using parametric formulae of poverty and inequality measures we propose statistical indicators for the levels variabilities and a statistical link of price indices and nominal living standards these indicators are consistent with an approximation of the problem based on a bivariate lognormal distribution of price indices and nominal living standards our analysis provides hints about the social welfare impact of economic shocks or policies affecting levels variabilities and correlation of prices and incomes intuitive insights are obtained while using arithmetic means and variances instead does not lead to illuminating results the role of price and income variabilities for poverty and inequality is more complex than generally expected with the possibility of several variation regimes empirical investigation of these statistics would guide social policies

counting and multidimensional poverty measurement this paper proposes a new methodology for multidimensional poverty measurement consisting of an identification method k that extends the traditional intersection and union approaches and a class of poverty measures m our identification step employs two forms of cutoff one within each dimension to determine whether a person is deprived in that dimension and a second across dimensions that identifies the poor by counting the dimensions in which a person is deprived the aggregation step employs the fgt measures appropriately adjusted to account for multidimensionality the axioms are presented as joint restrictions on identification and the measures and the methodology satisfies a range of desirable properties including decomposability the identification method is particularly well suited for use with ordinal data as is the first of our measures the adjusted headcount ratio we present some dominance results and an interpretation of the adjusted headcount ratio as a measure of unfreedom examples from the us and indonesia illustrate our methodology

the european union s emissions trading system this paper investigates the european union s emissions trading system eu ets which is often presented as the cornerstone of the eu s strategy for fighting climate change the paper analyses the basic design of the scheme its workings during the first trading period 2005 07 the adjustments made for the second trading period 2008 12 and its performance during the years 2008 and 2009 it also discusses the european commission s ec proposal to revise the eu ets for the period 2013 20 and the agreement reached the paper offers a critical assessment of the eu ets from a value theoretic and class based standpoint challenging mainstream accounts following the consultation and co decision processes that preceded the adoption of the eu ets directive and its amendment one reaches the conclusion that the eu ets has become the flagship of the european climate change programme because it is more conducive to the dominant eu industrial capitals that compete with non eu capitals under strenuous international market conditions the limited environmental effectiveness the windfall profits and distributional injustice that characterise the scheme from its start are pitfalls generated from the embeddedness of the scheme in the eu capitalist economies

competitiveness and exemptions from environmental taxes in europe a number of european countries have introduced a variety of environmental taxes a common characteristic of their implementation is the inclusion of exemptions and tax relief in particular for some sectors of manufacturing industry this paper analyses the pattern and motivation of exemptions as they have developed in western european countries making clear the difference between the nominal and effective tax rates once the exemptions have been taken into account the principal motivation for exemptions relates to concern about competitiveness while particular environmentally intensive sectors may have some grounds for concern even these might be able to achieve cost effective environmental improvements such that their competitive position is not over disadvantaged while for an economy structured like the uk s an environmental tax plus rebate scheme sometimes called an ecological tax reform would be likely to yield benefits in terms of competitiveness the exemptions usually run counter to the environmental economic logic of using environmental taxes to internalise social costs and give economic signals that are based on the full costs of production and they are likely to increase the costs of achieving a given level of emission reduction with little justification for them also on the grounds of competitiveness it would therefore be undesirable on both economic and environmental grounds for them to remain a feature of the implementation of environmental taxes in the future

consumption and income inequality and the great recession abstract we examine changes in consumption and income inequality between 2000 and 2011 during the most recent recession unemployment rose and asset values declined sharply we investigate how the recession affected inequality while addressing concerns about underreporting in consumption data income inequality rose throughout the period from 2000 to 2011 the 90 10 ratio was 19 percent higher at the end of this period than at the beginning in contrast consumption inequality rose during the first half of this period but then fell after 2005 by 2011 the 90 10 ratio for consumption was slightly lower than it was in 2000

consumption needs and inequality most empirical studies demonstrating a u turn in inequality in the united states are based on the distribution of income however utility is derived from the consumption of goods and services and there are many reasons to expect the distribution of expenditure to be different from the distribution of income the author demonstrates that consumption based inequality indexes actually decrease over the postwar era this conclusion differs from the stylized facts because of differences in the income and expenditure distributions differences also arise from the inclusion of equivalence scales to account for the different needs of heterogeneous households copyright 1994 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

asymmetric substitutability theory and some applications economists usually describe goods as being either gross complements or gross substitutes yet what is less known is that one good may be a gross substitute for a second good while the second good is a gross complement to the first good this paper shows the existence of asymmetric gross substitutability and shows some potential examples and applications

fertility household size and poverty in nepal population control policies keep attracting attention by increasing the household size having more children would directly contribute to a household s poverty using nationally representative household level data from nepal we investigate the links between a household s fertility decisions and variations in their size and composition we show that the relationship between number of births and household size is positive when the mothers are young but becomes negative as the mothers grow older elderly couples who had fewer children host on average more relatives who are outside the immediate family unit this result sheds light on the heterogeneous relation between the number of children and household size over the life cycle it also implies that reductions in a household s fertility may have an ambiguous impact on its per capita consumption which depends on how the household s composition responds to new births and changes over time in this sample an old household s per capita consumption is not affected by the number of births we use the gender of the first born child to instrument the total number of consecutive children

impacts of a rise in electricity tariff on prices of other products in vietnam abstract this study examines the impacts of increasing electricity tariff to the long run marginal cost on prices of other products using a static input output approach it is found that such an increase would drive up the prices of all other products although the aggregate price impact from such an increase is not large it would be socially difficult to implement this increase at one time particularly given that vietnam is facing high inflation rate a roadmap for electricity tariff increase is thus discussed

economic and environmental effects of a co2 tax in latin american countries abstract the environmental extension from the leontief pricing model is used to simulate the economic and environmental effects of setting different co2 tax rates in three latin american countries brazil mexico and chile it considers a regulatory scenario in which the tax is applied only to emissions from the electricity sector and another scenario in which tax is applied to emissions from all economic sectors the results show that the effects of a co2 tax on sectoral prices and emissions in each country are very different for the same tax rate but these effects are similar in each country when comparing both regulatory scenarios this is explained by the composition carbonization of the electric generation and energy matrix of each of the countries which significantly affects the effectiveness of co2 taxes to reduce emissions in addition the economic sectors most affected by the different regulatory scenarios are similar in all countries

wealthier is healthier we estimate the effect of income on health using cross country timeseries data on health infant and child mortality and life expectancy and income per capita we use instrumental variables estimates using exogenous determinants of income growth to identify the pure income effect on health isolated from reverse causation or incidental association the long run income elasticity of infant and child mortality in developing countries lies between 0 2 and 0 4 using these estimates we calculate that over a half a million child deaths in the developing world in 1990 alone can be attributed to the poor economic performance in the 1980s

has poverty gotten worse iven the major changes now being implemented in programs aimed atalleviating poverty in the united states it is important to have a goodunderstanding of how the extent of poverty has evolved over the lastcouple of decades has poverty gotten worse or have we been gradually winningthe war on poverty there is unanimous agreement that there was a steady and dramatic decreasein the percentage of the u s population in poverty during the 1960s the of cialu s census bureau gures show the poverty rate dropping from 22 4 percent ofthe population in 1959 to 12 6 percent in 1970 with a further decrease to11 1 percent in 1973 the trend since 1973 is not as clear the of cial poverty raterose somewhat during the latter part of the 1970s and then sharply increased dur ing the recession of the early 1980s reaching 15 2 percent in 1983 it then graduallydeclined hitting 12 8 percent in 1989 increased to 15 1 percent in 1993 and thendropped to 13 8 percent in 1995 according to the of cial rate even at the peakof the economic expansion of the late 1980s there was a higher percentage of thepopulation with income below the poverty line than there was 20 years earlier poverty does seem to have gotten worse this conclusion is controversial however because the way in which poverty isbest measured is controversial the of cial poverty scale has been criticized alonga number of dimensions one point of contention is whether people should bede ned as being poor when they are part of a family with

measuring the well being of the poor using income and consumption we examine the relative merits of consumption and income as measures of the material well being of the poor consumption offers several advantages over income because consumption is a more direct measure of well being than income and is less subject to underreporting bias measurement problems with income are problematic for analyses of changes in well being of the poor because the biases appear to have changed over time and are correlated with government policies on the other hand income is often easier to report and is available for much larger samples providing greater power to test hypotheses we begin by considering the conceptual and pragmatic reasons why consumption might be better or worse than income then we employ several empirical strategies to examine the quality of income and consumption data first we compare income and consumption reports for those with few resources as well as their assets and liabilities to examine measurement errors and under reporting second we examine other evidence on the internal consistency of reports of low income or consumption third we compare how well micro data in standard datasets weight up to match aggregates for classes of income and consumption that are especially important for low resource families fourth we validate income and consumption measures by comparing them to other measures of hardship or material well being although the evidence tends to favor consumption measures our analyses suggest that both measures should be used to assess the material well being of the poor

in search of giffen behavior in search of giffen behavior i introduction the existence of giffen behavior has intrigued students of traditional consumer theory for many years stigler 1947 1948 and hicks 1956 dealt with the giffen good by dismissing it as a theoretical possibility but a practical impossibility this solution was met with some discord especially by boland 1977 according to boland if demand theory cannot be revised to dismiss the theoretical possibility of a giffen good it should at least be able to explain why giffen goods do not exist empirically dougan 1982 answered boland s critique by demonstrating the impossibility of observing a giffen good at the market level because the estimated demand curve is the locus of market equilibria derived from a shifting supply curve it must slope downward in the long run if walrasian stability conditions hold this suggests empirical evidence of a giffen good from market data is impossible to obtain however the possibility of giffen behavior at the individual level is not ruled out more recently silberberg and walker 1984 explored the consistency of giffen behavior using marshall s additive utility assumption they conclude that the giffen paradox is consistent with marshall s assumptions but deem its actual existence a pathological case dwyer and lindsay 1984 provide an interesting historical perspective of the often cited irish potato example of giffen behavior they point out that no known reference by robert giffen to the irish potato exists although the example abounds in principles and intermediate textbooks 1 furthermore they argue that the classic irish potato example of a giffen good did not actually occur since a supply reduction due to the famine would have caused the price of potatoes to decline if potatoes were a giffen good but no such decline was observed interestingly recent experimental work by battalio dwyer and kagel 1987 battalio kagel and kogut 1988 and silberberg warren boulton and asano 1987 provides some evidence for the existence of giffen behavior the battalio kagel and kogut study found that poor rats those whose incomes only allow below normal levels of fluid intake decrease the quantity demanded for quinine water in response to a lower price rats used the increased purchasing power to buy larger quantities of root beer in a controlled experiment involving monkeys silberberg warren boulton and asano found an increase in the price of bitter food pellets caused consumption of these pellets to increase battalio dwyer and kagel found other evidence of giffen behavior in the form of labor supply curves that were positively sloped at low wages but backward bending at higher rates common textbook examples of giffen behavior meat and potatoes beer and whiskey or alfred marshall s transportation problem employing typical indifference curve illustrations take place in a two commodity world with exogenous prices and a negative income effect strong enough to overcome the substitution effect these classical examples rely on utility function implying unusually shaped indifference maps by contrast this paper shows how giffen behavior can occur independent to a large degree of the form of the utility function the model offers an alternative explanation of giffen like behavior that is consistent with commonly cited examples and recent experimental work the results illustrate not only the possibility but the plausibility of giffen behavior ii the utility maximization problem begin by considering the typical example of a giffen good that of potatoes and meat the analysis is confined to peasants of very modest means assume the two goods meat m and potatoes or spuds s have exogenously determined prices given by p sub m and p sub s respectively the fixed income of consumers is denoted by r following the typical presentation of the giffen problem further assume peasant incomes are too small for subsistence on meat alone but are sufficient for subsistence solely on potatoes

comparisons of poverty across periods significance of distributional effects of prices abstract this paper identifies flexible scales from two cross sections of fes data capturing the distributional effects of inflation poverty rates based on the flexible and simple per capita modified oecd deflators reveal different trends in poverty among households and children

diverging identification of the poor a non random process chile 1992 2017 abstract this paper investigates the degree of association in the identification of the poor between the standard monetary fgt poverty measure and the alkire foster multidimensional poverty index for this purpose we use a measure of redundancy in the identification of the poor between the two poverty measures r0 in chile over the past 25 years r0 has declined at a rate of 1 5 per year the decline is unimportant during the 1990s a decade of rapid economic growth while it is notable thereafter in a period characterized by modest economic growth and the progressive introduction and deepening of social policies the conditional correlation between socio economic and demographic characteristics with r0 is examined at the province and household levels after controlling for the household non eligibility across some of the indicators of the multidimensional poverty index we find that the divergence in the identification of the poor seems to be a real process which is not randomly distributed across the population it is correlated with education improvements increasing urbanization and reduction in household size on the basis of our results we argue that this divergence may be a more general phenomenon that tends to occur in countries undergoing demographic transition urbanization and progress in education if so and given the fact that poverty alleviation strategies are adopted partly on the basis of poverty statistics the diverging identification of the poor might have distributive consequences for the poor

the impact of the changing us family structure on child poverty and income inequality this paper analyses links between rising income inequality child poverty and one parent families in the united states from 1971 to 1989 one test reallocated weights so that 1989 proportions of children by mothers marital status resembled the 1971 distribution a second method used 1 simulated marriages among unmarried men and unmarried mothers in 1989 to reproduce 1971 marital patterns and 2 earnings responses induced by the simulated marriages the results indicate that the trend away from marriage accounted for almost half the increase in child income inequality and more than the entire rise in child poverty rates excerpt

pro poor economic growth inequality and fiscal policy the case of spanish regions ayala l and jurado a pro poor economic growth inequality and fiscal policy the case of spanish regions regional studies this paper aims to discuss whether substantive differences exist in terms of the distribution of economic growth by income groups in spanish regions in order to do so data from the spanish family budget surveys for various years are used to estimate growth incidence curves decomposition models of poverty changes and isopoverty curves the results show that while economic growth in the long term has meant an improvement of the lower income percentiles in spain this improvement is not uniform in the different regions limited possibilities for poverty reduction in the lower income regions are also found ayala l et jurado a pour la croissance economique faible l inegalite et la politique fiscale l etude de cas des regions d espagne regional studies cet article cherche a discuter si oui ou non il existe d importants ecarts de la distribution de la croissance economique pa

the reform of the european energy tax directive exploring potential economic impacts in the eu27 abstract the aim of this study is to analyze the effect that the energy tax directive reform proposed in 2011 would have if implemented on the level of prices in the different sectors of the 27 countries of the european union we apply a multiregional and multisectoral model of trade flows that takes into account all the intersectoral and intercountry interdependences in the production processes using the world input output database we perform two different simulations the first one considers the tax changes proposed by the reform the second one shows the impact the reform would have entailed if it were applied also to sectors belonging to the european trade system the main finding of the first simulation shows that the new energy tax regime would have had a low economic cost in terms of impact on prices less than 1 in all the countries so the concerns about competitiveness do not find empirical support in our results suggesting the need for further analyses to find out the reasons that caused the failure of a reform that was an important step to introduce a taxation explicitly linked to co 2 emissions the second simulation however leads to strongly different results pointing out the relevance of maintaining significant economic incentives to reduce carbon emissions for the european trade system sectors by improving the emission market performance or by applying carbon taxation also to these sectors

do snap participants expand non food spending when they receive more snap benefits evidence from the 2009 snap benefits increase this study examines the expenditure response to the largest increase in supplemental nutrition assistance program benefits instituted in april 2009 investigating the effects in both food and non food spending categories i find that the rise in snap benefits increased not only food at home expenditures but also housing transportation and education expenditures of snap households relative to those of non snap households specifically the snap benefit increase leads to the reduced out of pocket spending on food for infra marginal snap recipients and the freed up resources allowed households with bounded budgets to fund other essential needs such as paying mortgage rent utility fee transportation expenses as well as tuition examining non food expenditures provides a more complete picture of the impact of the snap benefit increase by shedding light on the spillover effect of the policy change the result also derives policy implication on ongoing debate about snap allotment generosity

consumption inequality and income uncertainty this paper places the debate over using consumption or income in studies of inequality growth in a formal intertemporal setting it highlights the importance of permanent and transitory income uncertainty in the evaluation of growth in consumption inequality we derive conditions under which the growth of variances and covariances of income and consumption can be used to separately identify the growth in the variance of permanent and transitory income shocks household data from britain for the period 1968 1992 are used to show a strong growth in transitory inequality toward the end of this period while younger cohorts are shown to face significantly higher levels of permanent inequality

human development in poor countries on the role of private incomes and public services development is often taken to mean rising incomes discussions of the goals of development now often emphasize the reduction of poverty rather than raising average incomes per se the role of social services particularly basic health and education has also received greater emphasis in the 1980s viewed mainly as instruments for raising the incomes of the poor but in all these approaches income growth of one sort or another is what development is all about a rather different view of the meaning of development has recently found expression in the 1990 human development report hrd produced by the united nations development programme a conceptual underpinning for this approach can be found in the work of amartya sen the essence of this view is that human development what people can actually do and be is the overriding purpose of economic development underdevelopment is viewed as the lack of certain basic capabilities rather than lack of income per se we do not aim here to advocate one of these approaches over the other but rather to explore their implications for development policy for instance what does the human development approach imply about the role of economic growth and in particular about reducing income poverty should development priorities shift toward the provision of public services in poor countries even if such a shift is at the expense of income growth

economic well being and poverty among the elderly an analysis based on a collective consumption model we apply the collective consumption model of browning chiappori and lewbel 2006 to analyse economic well being and poverty among the elderly the model focuses on individual preferences a consumption technology that captures the economies of scale of living in a couple and a sharing rule that governs the intra household allocation of resources the model is applied to a time series of dutch consumption expenditure surveys our empirical results indicate substantial economies of scale and a wife s share that is increasing in total expenditures we further calculated poverty rates by means of the collective consumption model collective poverty rates of widows and widowers turn out to be slightly lower than traditional ones based on a standard equivalence scale poverty among women men in elderly couples however seems to be heavily underestimated overestimated by the traditional approach finally we analysed the impact of becoming a widow er based on cross sectional evidence we nd that the drop increase in material well being following the husband s death is substantial for women in high low expenditure couples for men the picture is reversed

poverty in america 1970 1990 who did gain ground an application of stochastic dominance criteria employing simultaneous inequality tests in a partial panel atkinson 1987 proposed stochastic dominance criteria for analysing poverty which under certain conditions establish orderings of states for any poverty line and any poverty measure within given class refocusing debate on the nature of the income distribution of the poor employing new empirical techniques these criteria are implemented for the united states from 1970 to 1990 using the panel study of income dynamics results highlight the pivotal role of family size scale economies in consumption indicate different experiences for white versus non white groups and suggest that optimism over the progress of the poor is not warranted copyright 2003 john wiley sons ltd

issues in measuring and modeling poverty economists have relied heavily on household incomes or expenditures normalized for differences in household specific prices and demographics in their research and policy advice related to poverty and inequality recognizing the conceptual and empirical problems that confound such measures does not mean that they should be ignored instead it indicates the need for supplementary measures to capture the missing items implementing a genuinely multidimensional approach will often make the welfare rankings of social states more difficult but that fact points to the nonrobustness of low dimensional rankings this may have its own policy ramifications with the possibility of correspondence between policy instruments and welfare objectives the model types used to understand the poverty and inequity determination processes will be affected not only will there be more dependent variables to consider but variables will have potentially complex relationships these relationships will often be hard to empirically disentangle despite richer integrated and longitudinal data sets such data open rich and relevant agenda for research into the dynamics of poverty along multiple dimensions a simultaneous attack on these issues from all three fronts measurement modeling and data offers hope of establishing a credible empirical foundation for public action in fighting poverty

on the relative weil being of the nonmetropolitan poor an examination of alternate definitions of poverty during the 1990s using foster greer thorbecke poverty indices this paper shows that although the incidence of poverty was higher in nonmetropolitan than metropolitan areas throughout the 1990s the poverty gap index was only statistically significantly higher in nonmetropolitan areas in six of the 10 years and the squared poverty gap index was worse in only three years this paper also provides design corrected standard errors for the indices which result in more than doubling the uncorrected estimates an examination of the ratio of the poverty gap to the head count index establishes that the average shortfall of the poor as a fraction of the poverty line was worse in the metropolitan areas during all 10 years of the 1990s similarly the distribution of income divided by the poverty line indicates that disproportionately more of the nonmetropolitan poor subsisted on incomes near the poverty line whereas the metropolitan poor were relatively more likely to be living in extreme poverty

from earnings inequality to consumption inequality this paper studies the paths from inequality in earnings to inequality in household consumption we show that careful study of the evolution of the variances and covariances of earnings and consumption within cohorts across time can identify permanent and transitory shocks we present an application to the evolution of inequality in the united kingdom we extend previous results to recognise separate earnings of partners in couples

consumption and risk sharing over the life cycle a striking feature of u s data on income and consumption is that inequality increases with age this paper asks if individual specific earnings risk can provide a coherent explanation we find that it can we construct an overlapping generations general equilibrium model in which households face uninsurable earnings shocks over the course of their lifetimes earnings inequality is exogenous and is calibrated to match data from the u s panel study on income dynamics consumption inequality is endogenous and matches well data from the u s consumer expenditure survey the total risk households face is decomposed into that realized before entering the labor market and that realized throughout the working years in welfare terms the latter is found to be more important than the former

giffen behavior and subsistence consumption this paper provides the first real world evidence of giffen behavior i e upward sloping demand subsidizing the prices of dietary staples for extremely poor households in two provinces of china we find strong evidence of giffen behavior for rice in hunan and weaker evidence for wheat in gansu the data provide new insight into the consumption behavior of the poor who act as though maximizing utility subject to subsistence concerns we find that their elasticity of demand depends significantly and nonlinearly on the severity of their poverty understanding this heterogeneity is important for the effective design of welfare programs for the poor jel d12 012

measuring the influence of energy prices in the price formation mechanism abstract environmental economics has proposed taxation on energy as a way of mitigating the pollution caused by the production and use of energy based on fossil fuels however it is generally assumed that energy is an important component of production costs and that taxes on energy have a detrimental impact on the economy this paper provides a method of analysing the extent to which energy prices influence the price formation mechanism the model used is based on a social accounting matrix sam the sam price model identifies the role of energy prices in the cost and price definition processes the empirical application is for the catalan economy and shows that energy prices have a considerable influence on both production and final prices and that different forms of energy exert asymmetric impacts on costs for sectors and consumers

gaining ground poverty in the postwar united states official measures of poverty in the united states are compiled by the bureau of the census by comparing a household s income level to a prespecified threshold from a theoretical perspective it is more appropriate to evaluate the level of poverty using a consumption based measure of household welfare in this paper i evaluate the level of poverty using expenditure data from the consumer expenditure survey i find that consumption based poverty rates are much lower than those based on income the trend in the poverty rate in the united states is sensitive to the price index and equivalence scales used to adjust the poverty thresholds

prices and living standards evidence for rwanda abstract we review the explanations of the statistical relationship between spatial price indices and real living standards then using data from several seasons in rural rwanda we show that these variables are negatively associated hinting at price discrimination against the poor in that case policies permanently improving of market functioning may simultaneously improve efficiency and equity moreover under a hypothesis of weak association of nominal living standards and price indices we derive simplified formulae for social welfare indicators these formulae depend only on a small number of sample statistics obtainable from separate publications for prices and living standards

intertemporal and interprovincial variations in income inequality spain 1973 1991 goerlich f j and mas m 2002 intertemporal and interprovincial variations in income inequality spain 1973 1991 reg studies 36 1005 1015 the paper presents the main findings on personal income distribution for the spanish provinces over the period 1973 91 the information comes from the three structural household budget surveys and has been elaborated by the authors on a homogeneous base available at http www ivie es it starts by reviewing the information provided by some dispersion statistics including kernel density functions applied to the provincial gini indices and lorenz percentiles it goes on to test making use of an anova model two propositions related with intertemporal and interprovincial variations in inequality the penultimate section before the conclusions deals with the estimation of convergence equations in inequality

a simple approach to investigate intrahousehold allocation of private and public goods abstract we adopt the collective approach to consumer behavior with egoistic agents and assume that household consumption is either private or public we then show that 1 household demand functions have to satisfy testable constraints and 2 some elements of the decision process can be retrieved from observed behavior these results are based on a conditional demand m demand framework in which household demand functions are directly derived from the individual marginal rates of substitution finally we present an empirical illustration of these theoretical results using the u s consumer expenditure survey

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

the more things change the more they stay the same the safety net and poverty in the great recession much attention has been given to the large increases in safety net spending during the great recession we examine the relationship between poverty the safety net and business cycles historically and test whether there has been a significant change in this relationship we find that post welfare reform temporary assistance for needy families did not respond during the great recession and extreme poverty is more cyclical than in prior recessions food stamps and unemployment insurance are providing more protection or no less protection in the great recession and there is some evidence of less cyclicality for 100 poverty

inequality in the joint distribution of consumption and time use abstract this paper examines inequality in both leisure and consumption over the past four decades using time use surveys stretching from 1975 to 2016 we estimate the distribution of leisure time conditional on hours worked and other individual level and family level characteristics we show that these characteristics especially when including work hours explain most of the long run variation in leisure we then use these estimates to predict the distribution of leisure using work hours and other characteristics in the consumer expenditure survey a survey that also provides detailed information on consumption the advantage of this approach is that it gives us measures of consumption and leisure at the family level within a single data source combining consumption and leisure allows us to characterize more accurately changes in the distribution of well being we find that leisure time is highest for families at the bottom of the consumption distribution and typically declines monotonically as consumption rises however the consumption leisure gradient is small we find noticeable differences across family types with the gradient being largest for single parent families and single individuals and smallest for families with a head age 65 or older the negative relationship between consumption and leisure appears strongest during the period around the great recession we find that including both leisure and consumption as opposed to just consumption in a measure of economic well being results in less inequality the negative association between leisure and consumption is a sufficient condition for this result however the degree to which leisure inequality offsets consumption inequality depends on the valuation of leisure

consumption versus expenditure previous authors have documented a dramatic decline in food expenditures at the time of retirement we show that this is matched by an equally dramatic rise in time spent shopping for and preparing meals using a novel data set that collects detailed food diaries for a large cross section of u s households we show that neither the quality nor the quantity of food intake deteriorates with retirement status we also show that unemployed households experience a decline in food expenditure and food consumption commensurate with the impact of job displacement on permanent income these results highlight how direct measures of consumption distinguish between anticipated and unanticipated shocks to income whereas measures of expenditures obscure the distinction

when do women use aid to families with dependent children and food stamps the dynamics of eligibility versus participation this paper investigates dynamic patterns in the relationship between eligibility and participation in the aid to families with dependent children afdc and food stamp programs using monthly longitudinal data from the survey of income and program participation the results indicate that there are many relatively short eligibility spells that do not result in program participation and end with increases in income participation is most likely to occur among women with lower current and future earnings opportunities and is affected by locational and policy parameters those who elect to participate in these programs tend to start receiving benefits almost immediately upon becoming eligible a substantial number of women exit these programs before their eligibility ends among at least some of these women it is likely that unreported changes in income are occurring in 1989 if all eligible single parent families had participated in afdc and food stamps benefit payments in these programs would have been 13 5 billion higher

how does tax system on energy industries affect energy demand co2 emissions and economy in china abstract energy savings and co2 emission reduction have become a major issue in recent years taxes on energy production sectors may be an effective way to save energy reduce co2 emissions and improve environmental quality this paper constructs a dynamic recursive computable general equilibrium cge model to analyze the impact of the energy tax on energy economy and environment from the perspective of tax rates and tax forms specific tax and ad valorem tax the results show that adjusting the tax system and the tax rate has important implications for energy conservation while having minor impacts on the output of other industries the impact of an increasing energy tax on the energy demand is greater than the impact on sectoral output indicating that energy efficiency will be increased to some extent the co2 reduction will increase over time when an ad valorem tax is implemented on enterprises we found that ad valorem tax has greater elasticity of economic output energy demand and co2 emission reduction the results support the direction of china s resource tax reform however we argue that it is better to increase the tax rate relatively and relax the control on energy prices so that energy efficiency will increase

defining poverty lines as a fraction of central tendency we show under lognormality that when the gini coefficient is stable over time defining the poverty line as a fraction of a central tendency of the living standard distribution restricts the evolution of the poverty measures to be stable that is poverty does not change if the gini coefficient does not change moreover when the gini coefficient slightly changes most of the poverty change can be considered a change in inequality then the consequences of using different poverty lines are analysed thus important features in studies of poverty change based on these lines may result from methodological choices rather than from economic mechanisms