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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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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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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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1answer
38 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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1answer
31 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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1answer
53 views

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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40 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
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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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1answer
38 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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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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166 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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1answer
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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
67 views

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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1answer
63 views

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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246 views

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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1answer
111 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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1answer
246 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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2answers
137 views

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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2answers
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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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1answer
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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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111 views

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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2answers
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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 ...
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4answers
173 views

Why do government jobs provide better benefits than industry jobs?

I've noticed how government jobs in the US are known to have generous pensions, healthcare plans, vacation time, etc. as compared to the corresponding job in the private sector. (I haven't actually ...
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1answer
180 views

Minimum wage vs wage subsdies

Many politicians argue that the minimum wage is essential for providing an sufficient standard of living to all. However, there are many issues binding price floors predicted by standard supply and ...
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Economic policies to decrease obesity (would they be effective?)

According to the Center for Disease Control and Prevention, approximately 35% of adults in the United States are obese. I have done much research on the topic of economic policies to reduce obesity (I ...
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1answer
124 views

What would happen if total welfare were evenly distributed?

Suppose that there is a market with a large number of consumers and producers. Assume that the government knows the reservation prices of all people in the market. Suppose that the government uses ...
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Why might a country with a budget surplus continue issuing bonds - ie borrowing?

Some argue that if a government runs a budgetary deficit, it is a drag on the public finances because taxpayers must fund interest payments to external creditors. If the interest payments were an ...
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1answer
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Can the benefits provided by the Ex-Im Bank of the US be considered a Public Good?

With the debate surrounding the upcoming re-authorization of the Ex-Im Bank of the US, I wanted to hear from someone who might know. What is the best case to be made for its continued operation? I ...
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1answer
544 views

Effect of specific tax on demand and supply

There are intersecting supply and demand curves. A tax is levied on suppliers. Say the tax is a fixed tax (for example, VAT) and not an ad valorem tax. Why can we not just move along the demand ...
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149 views

Optimal commodity taxation - solving for the optimal tax rates?

I need to solve for optimal tax rates for two products. In my model there are N identical households that maximize their utility function subject to a budget ...
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Where should I start to teach myself 'comparative housing and urban planning'?

For my own research, I need to teach myself the basics of the research areas of Dr Morrison, Department of Land Economy, U.of Cambridge. Sorry if this is the wrong SE site, but the title 'Land Economy'...
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1answer
114 views

Do countries invest in the country's own stock market?

For example can the government of the UK invest in some company with shares in the FTSE 100? Or can Russia take the opportunity now that the shares of oil companies are low to buy them?
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Is a universal basic income possible in the United States?

Is a universal basic income or unconditional demogrant possible in the United States? (For the sake of specificity I have focused the question on the US, though the question is certainly interesting ...
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1answer
457 views

What is William Nordhaus' contribution to the economics of climate change?

I'm trying to understand more about the economic repercussions of climate change. I'm unfamiliar with the specifics of the work of William Nordhaus, but it's been predicted in several instances that ...
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1answer
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What models exists for explaining the price of nonrenewable resources?

It seems to me that the seminal model for the price of nonrenewable resources is Hotelling's rule. However, as the Wikipedia article describes, Hotelling's rule has empirically performed poorly. I ...
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Simple Sketch of Mirrlees 1971

Mirrlees' 1971 paper (An Exploration in the Theory of Optimum Income Taxation) on optimal taxation can sometimes be hard to follow. Does anybody know of (or could even provide here) a simple sketch of ...
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2answers
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Are the figures quoted in this liblabcon's blog post accurate? (topic: UK banks)

Background With regards to the UK government. I have recently been involved in a debate stemming from figures mentioned in this blog post (the blogger was advocated by Occupy London's facebook page ...
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1answer
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Policy relevance of the optimal taxation given uncertainty about social welfare specification

One common criticism in the optimal taxation literature is the specification of the social welfare function. The optimal taxation literature (I have the Mirrlees framework in mind) relies on first ...
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725 views

Why is capital income taxed differently than wage income?

Why is income from capital gains taxed differently than wage income? There are perhaps historical, practical, and theoretical reasons. What are they? (As far as historical reason go, I'm asking ...