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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Is climate change an economic question?

The assumption that the Keeling Curve can be approximated with a function $$k=A+B\cdot e^{\alpha t}$$ leads to a solution with $A=258.6$, $B=4,243\cdot 10^{-13}$ and $\alpha=0.0166$ with a high ...
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Any difference between the DWL results from tax and binding price ceiling, what makes govenment choose one over another?

Same as the title. From the Graphs, I cannot see any difference or what makes policymakers to distinguished those two? Here is the capture from Perloff's textbook. Now compare this with the case that ...
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1answer
149 views

Pigouvian tax equivalent to Coasian payments

Consider an economy with two goods, $x$ and $y$. Suppose person a's consumption of good $y$ imposes a negative externality on person b. Person a's utility maximisation problem is $$\max_{x_a,y_a} \ ...
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Pigouvian tax with general utility function

Suppose person a's consumption of good $y$ imposes a negative externality on person b. Person a's utility maximisation problem is $$\max_{x_a,y_a} \ u_a(x_a,y_a),$$ subject to $$p_x x_a+p_y y_a=e_a.$$ ...
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52 views

Is it always a trade off between efficiency and equity?

Is there any situations where we can achieve both equity and efficiency? I'm thinking of Covid 19 vaccine program which is run by Goverment. Although the cost for the program is paid by the money from ...
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Understanding an article in the BMJ about the sugar tax

The research paper Changes in soft drinks purchased by British households associated with the UK soft drinks industry levy: controlled interrupted time series analysis was examining the impact of the ...
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0answers
43 views

Event study by Kleven

I was reading the following paper by Henrik Kleven et al. https://www.henrikkleven.com/uploads/3/7/3/1/37310663/kleven-landais-sogaard_nber-w24219_jan2018.pdf The estimate the child penalty on wage ...
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Is there a source which informs the public of who is buying up newly issued U.S. Government debt?

Is there a list somewhere of who is buying the newly issued debt that will finance the American Rescue Plan (the $1.8 trillion stimulus package signed recently)? Of course, I have an idea of who owns ...
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What are the 'Public Account Liabilities' of the Government of India?

In the Quarterly Report on Public Debt Management for the Quarter Jul - Sep 2020 of the Government of India, an increase in 'Public Debt Liabilities' is declared. What are they?
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Total Derivative of a Max Function: Maximizing Social Welfare Function

I'm studying public economics but my question here is purely mathematical in nature. I have a function: $$ V(1-\tau, R) = \max_zu((1-\tau)z+R,z) $$ I need to take the total derivative of this, in my ...
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1answer
28 views

Formalizing unorganized Sector

This is a fairly basic question. What are the real benefits of formalizing the unorganized sector? What does integrating these into the organized sector achieve other than maybe increased tax revenue ...
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Consumption Externalities in partial equilibrium analysis

I've been working on a standard partial equilibrium with externalities problem and have been having some difficulty with these (relatively) basic concepts. My issue is primarly with solving for Pareto ...
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57 views

Is a smartphone app(Non premium or subscribed service like Netflix) a public good?

A smartphone app that provides users with information on surf conditions at their location. (“Surf conditions” refers to information on wind, waves, and ocean tides that is useful for surfers). For ...
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World Bank and OECD statistics unmatch tax revenue as % of GDP

I have been looking for statistics on tax revenue to GDP ratio of different countries. I've found it on World Bank website. https://data.worldbank.org/indicator/GC.TAX.TOTL.GD.ZS?view=chart which ...
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What is the opposite of public debt?

The opposite of a budget deficit is a budget surplus But what is the opposite of public debt? Instead of govt/state being in debt, having the government have extra money to keep or to lend it to banks ...
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What are concrete values of public goods?

Are there any good studies on what are estimated values of public goods? For example, suppose a public library, bridge, school, or lighthouse is a public good, what is the value per person for these ...
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130 views

Do countries with centrally-planned economy have Entrepreneurship as a factor of production?

Let's don't count self-employed people without other employees (like "lone wolf" craftsmen) and people who have an illegal business as entrepreneurs. By centrally-planed economy I mean an ...
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1answer
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Coase theorem study material

I'd like to read a more detailed/mathematical analysis on the subject of Coase's theorem. Could you perhaps suggest any advanced textbook/paper on the matter?
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Unions, right to work laws [closed]

Can anyone explain what right to work laws are? along with any thoughts about unions. Do they actually benefit the worker and overall market? Thank you.
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Can I use the released data on AER and JPE in my own research without permission?

I don't think JPE has suggested a specific license. However, the journal did say that the data policy is adopted from American Economic Review (AER). AER did suggest a license of Creative Commons ...
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Efficiency-related reason for net social benefits from income taxation

Found a question that I cannot really find an answer to. I am being asked to consider an economy with many households and assume that the government can only generate revenue by taxing households' ...
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utility from providing public good as explained in Hindriks textbook

I think I understood the highlighted part: basically, by increasing $g^1$ my utility increases because more public good is being provided but at the same time it decreases because I have less money to ...
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1answer
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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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1answer
156 views

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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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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128 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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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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Does the 2nd welfare theorem involve government intervention? [closed]

How is the initial redistribution of resources carried out?
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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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164 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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187 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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136 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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106 views

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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86 views

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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1answer
84 views

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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1answer
63 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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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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1answer
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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 ...