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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34
votes
3answers
2k views

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 ...
29
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6answers
2k views

What benefits do governments receive from not eliminating debt?

Most major economies have substantial government debt; for example among the OECD countries the lowest debt rate is Estonia with around 6% of GDP. Now we may be in a global recession at the moment, ...
18
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2answers
748 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 ...
17
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5answers
2k views

Unemployment and the Minimum Wage---what are the main counter-arguments to Card and Krueger?

Card and Krueger's paper (AER 1994, "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania") uses a difference-in-difference identification strategy to ...
14
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7answers
2k views

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 ...
14
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1answer
173 views

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 ...
9
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2answers
100 views

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 ...
8
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1answer
138 views

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 ...
7
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2answers
132 views

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 ...
7
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4answers
985 views

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 ...
7
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2answers
142 views

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, ...
6
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1answer
88 views

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 ...
6
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1answer
84 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, ...
5
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1answer
192 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 ...
5
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1answer
472 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 ...
4
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3answers
3k views

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 ...
4
votes
4answers
181 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 ...
4
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1answer
133 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?
4
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2answers
114 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. ...
4
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2answers
303 views

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 ...
4
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0answers
52 views

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'...
4
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1answer
152 views

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 ...
3
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2answers
136 views

“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 ...
3
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1answer
561 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 ...
3
votes
2answers
157 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? ...
3
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1answer
35 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 ...
3
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1answer
59 views

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{...
3
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0answers
157 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 ...
2
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2answers
67 views

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 ...
2
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1answer
73 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 ...
2
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0answers
27 views

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 ...
2
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0answers
133 views

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 ...
2
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1answer
45 views

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 ...
2
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0answers
212 views

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 ...
1
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1answer
124 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 - ...
1
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1answer
78 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 ...
1
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1answer
40 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 $c$,...
1
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1answer
442 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 ...
1
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1answer
177 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 ...
1
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1answer
81 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?
1
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2answers
56 views

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 ...
1
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1answer
133 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 ...
1
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0answers
167 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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0answers
27 views

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 ...
1
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0answers
25 views

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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0answers
372 views

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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0answers
214 views

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 $...
1
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0answers
27 views

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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0answers
99 views

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 ...
0
votes
3answers
99 views

Why the USA is not capable to pay it's debt?

Why the USA is not capable to pay it's public debt on it's own? The country needs to create new debt in order to pay it's due debt. Not only that, but the debt is also only increasing and the ...