Questions tagged [public-economics]

Public economics (or economics of the public sector) is the study of government policy through the lens of economic efficiency and equity.

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Cardinal Voting, Incentive Compatibility and Secrecy

Is there any available/feasible/practical way to make a Cardinal Voting both Incentive Compatible and Secret? A method to make a cardinal voting incentive compatible would be to force them to put ...
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Papers on the rate of returns for government-run pension plans

I'm looking for papers studying the implied rate of return for various government pension programs around the world. Both historical and expected returns. Or any study that looks at the taxes for the ...
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Equity-efficiency tradeoff examples

What could be an example of equity-efficiency tradeoff in healthcare, social protection or defense? For environment I did think of pollution permits that can cause geographical differences in ...
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Empirically checking efficiency and equity

I am aware that because of externalities or public goods (or for other reasons) there can be no allocative efficiency on the market. I am also aware that policy makers' subjective judgement of the ...
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nash equilibrium public good - is this correct? [closed]

Two players, 1 and 2, simultaneously choose their consumption of a public good. Given the consumption choices, g1 and g2, player 1 derives a marginal benefit of MB1 = 10 - (g1 + g2), while player 2's ...
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Economics of corruption

I am planning to do a paper on economics of corrpution, on the effects of corruption on public goods in developing countries. I wanted to know some authors or papers that I could refer to, since I am ...
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56 views

Sign of income effect is ambiguous

When discussing the standard neoclassical model of labor supply, I have seen it is assumed that the sign of the income effect is ambiguous. Could anyone please explain this assumption, and more ...
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84 views

Show that this income tax is effectively a lump sum tax

This is a standard income, leisure tradeoff model. $$ \max_{c,l} \min\{c; l\} $$ $$s.t. \space c = w(1-t)(1-l)$$ $l$ is leisure (where total time is 1), $w$ is wage, $c$ is consumption, and $t$ is ...
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Can a progressive marginal taxation be regressive in terms of average tax rate?

Or does progressive marginal taxation imply that it is a progressive average taxation? Here, I mean that if $T(Y)$ is a tax function of income, marginal tax rate would be $dT/dY$ and average tax rate ...
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Calculation of Inflation and purchasing power

kindly I'm stuck in this problem instead of many attempts through net present value and other discounted cash flow methods, some one could give me a detailed information and answers on this problem : (...
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Would apprenticeships improve the economy long term?

Evening my name is Nick and I am a high school student from Fairfield California and I’m 17, my super hyper theatrical question is about a substitute to college in order to create more efficiency in ...
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What are the effects of an insurance policy that partially covers medical treatment on several market properties?

Question: Consider an insurance policy that pays 50% of the price for a medical treatment. Assuming that the market price equals marginal cost, what effect does the insurance policy have on the ...
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Does the 2nd welfare theorem involve government intervention? [closed]

How is the initial redistribution of resources carried out?
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How would tax incentives influence the connections between the public and market squares, and the taxpayer-political enterprise relations?

I'm supposed to read a book written by Wagner, Richard E., Fiscal Sociology and the Theory of Public Finance, Cheltenham: Edward Elgar, 2007. To answer the question: How would tax incentives ...
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Nash equilibrium - mistake in proof of paper?

I have a question regarding the proof of Proposition 1 in Besley and Ghatak (2007) in Appendix A of their paper. It is a quite highly cited paper but I believe there is a mistake in the proof of their ...
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118 views

Why is the USA not capable to pay its debt?

Why is the USA not capable to pay its public debt on its own? The country needs to create new debt in order to pay its due debt. Not only that, but the debt is also only increasing and the country ...
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Is it possible to pay the internal debt of the country and to cover the budget deficit by increasing taxes?

Say for example the US govt. is putting an extra tax of 10% on the incomes of the people earning more than the average income. To make it easier, only tax the people earning more than 110% of the ...
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Can State Owned Enterprises compete with each other without a private enterprise in a market? Examples

In a domestic market, there exist multiple (around 5) multi-product state-owned enterprises. In a few products, SOEs compete with private enterprises while in the majority of products, the SOEs share ...
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“The citizens know their own utility functions better than the politicians”

In informal discussions about public policy, I often hear the claim that the government should not intervene in a certain way, because the citizens know what is good for them better than the ...
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What are the impacts of a small increase of the wages on consumption, labor supply and production?

We have given the utility function $\displaystyle U(v(c)-k(l))$ where $\displaystyle u$ and $\displaystyle v$ are increasing and concave functions and $\displaystyle k$ is increasing and convex. ...
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172 views

Can the internet be characterized as a public utility?

The idea of what a public utility is, economically, rather than just legally is not a new point of discussion. Philosophers like John Stuart Mill argued for the public provision of water and gas, ...
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135 views

Is debt servicing in the structural or cyclical budget balance?

Are the interest payments on government debt to be considered in the structural or the cyclical budget balance? I think, since it's independent on the state of the economy, then they should go to the ...
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How do we determine if wealth will be created or destroyed (and how much) when we want to provide (quasi)public goods?

It seems quite simple under framework of free market, when there are no taxes or subsidies,price celling or price floors, etc, that can mess up the market: if there is profit (or will be, according to ...
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Calculate power for multiple rounds of public goods experiment

I would like to calculate/simulate the a-priori necessary sample size for a repeated public goods experiment. $N$ Participants play $R$ rounds of a public goods game (linear, voluntary contribution ...
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What are some good advanced level textbooks on public economics?

I'm taking a public policy course and the textbooks that were recommended for the course are way out of sync with the course material. These are: Gruber, Public Finance and Public Policy Stiglitz, ...
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Well-informed citizen can contribute better to country's economy?

As the title stated, how can a person from the general public contribute to country's economy by being well-informed? I understand one of the reason would be tax. If a person understands the ...
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Gelman and Hill's Data on Effects of Child Support Enforcement

In Gelman and Hill's 2007 book, Data Analysis Using Regression and Multilevel/Hierarchical Models, chapter 11 begins the exploration of multilevel models. To do so, they introduce a data set that ...
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43 views

Aggregating in a Continuum

I am working with the following Economic model of labour and consumption decisions: I have a population whose mass is normalized to one of consumers. They derive utility from consumption $c$,...
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Why (Im) is gross(before personal tax-BPT) rate of return(ROR) by saver?It should be net ROR & APT, as SS' curve is after personal tax is imposed [closed]

![the image was taken from public finance book by Musgrave and Musgrave ]1Pave 156(fig. 9.5)
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Isn't it trivial that preferences are single-peaked over two alternatives?

I'm studying Down's Median Voter Theorem which states that if voters have single-peaked preferences over two alternatives arranged along a one-dimensional political spectrum, a majority rule voting ...
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Why don't public transport networks have more routes to each terminal in order to reduce the number of transfers?

When using public transport, we often need to transfer to a different route during of the journey. These transfers have costs – I can think of the following, but there may be more. If we're reading, ...
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178 views

Can a spending freeze solve the problem of the Italian enormous government debt?

In view of the upcoming Italian general election, I've been reading the program of a party (please let me know in the comments whether I can/should mention its name), and in a section of it they ...
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Net Neutrality and Recent Telecom Projects

It has come to my attention that the big telecom providers are launching some big infrastructural projects recently (at the time of post, Jan. 2018). I presume by that they mean talking laying cables ...
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Contest game: second order condition satisfied, but negative profits?

The following is taken from Nti (1999) Consider a 2 player game in which each exerts effort in attempt to win a prize. Let $V_1$ be player $1$'s valuation of the prize and let $V_2$ be player $2$'s ...
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How is productivity measured in public sector?

How do they measure productivity in the public sector? Companies just say this is how much money we make per input but what about the public sector?
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Private and Social Optimum with externality in this example

Firstly, I wanted to know if we may be consider as an externality, a situation such that a customer A bought a bike to a seller B, not properly checked - and which may provoke some accidents. ...
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price floor and price ceiling

I am studying basics of economics. I don't understand why a maximum price should be set below equilibrium price and minimum should be above. shouldn't it be the other way round?
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Effects of ACA individual mandate vs AHCA surcharge

The US Congress is currently considering a new healthcare bill, the AHCA, which would replace the existing healthcare bill, the ACA. One of the major changes is the way each bill encourages people to ...
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134 views

Effect of changing Non Labor Income on Consumption-Leisure problem

Given a Utility function $U(c,l) = c - \frac{1}{2}l^2$ , where $c$ is the consumption and $l$ is the number of hours of labour. Let $L$ be the maximum amount of labor, so the amount of leisure is $L - ...
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Pigouvian subsidies for non-linear marginal external benefits

Suppose an agent is choosing how much $x$ to consume and $p_x=200$. If the agent's marginal private benefit is $MPB(x)=300/x$ and $x$ takes only integer values, then he will choose to purchase just ...
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483 views

Negative expenditures in public budgets

I need to better understand the concept of negative expenditure in UK public spending. The definition says Receipts classified as negative public expenditure receipts are netted off, and hence ...
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About Lindahl equilibrium and Pareto Optimality

Let an economy with 20 consumers, one private good $x_2$ and one public good $x_1$. The public good is produced using the private good as input with the following technology $x_1=g(z)=z^{1/2}$, where $...
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Is my logic on taxation for this question legit?

At Fenway Park, home of the Boston Red Sox, seating is limited to 39,000. Hence, the number of tickets issued is fixed at that figure. Seeing a golden opportunity to raise revenue, the City of Boston ...
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Does the government have a role to play in certifying people's abilities for the labor market?

The nature of information often makes it look like a public good. Is this the case for certification of peoples abilities? Is there a role the government could play in certifying people's abilities? ...
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Is information technology going to turn most “common goods” into private goods?

Common goods, (not public) are so because they are non-excludable and rival. Often this reflects the impracticality of excluding some users, rather than an absolute impossibility. For example, a park ...
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Joint Dynamic Programming: Group Activity

Here we have two agents who can spend their time doing some group activity ($h$) or staying at home ($l$). Each agent $i$ is trying to maximize their respective dynamic programming problem: \begin{...
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Is public infrastructure a subsidy to capital?

https://www.researchgate.net/publication/228376470_The_Distributional_Consequences_of_Government_Spending Very interesting little model. Government infrastructure spending increases wages in the ...
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Why is government debt level presented as ratio to GDP, not against government budget or revenue size?

A country's public debt is often presented as ratio to GDP. For example, in Wikipedia, List of countries by public debt or National debt of the United States both use ratio or percentages of GDP. ...
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How is Singapore able to provide first-world public services, given its low income tax rate?

Singapore has a relatively low personal income tax rate. Somebody who earns $80,000 after deductions only pay 3,350 in taxes, or about 4% effective rate (see 2012-2016 tax table). 80,000 is already ...
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Articles about police complaints for a lit review?

I'm doing a research paper about how different cities have different quality of police service. I want to do a regression where the dependent variable is number of sustained complaints per 10 officers ...