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.

Filter by
Sorted by
Tagged with
33
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 ...
30
votes
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
votes
2answers
794 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
votes
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
votes
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 ...
13
votes
1answer
206 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
votes
2answers
120 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
votes
4answers
1k 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 ...
8
votes
2answers
172 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, ...
8
votes
1answer
162 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
votes
2answers
138 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 ...
6
votes
1answer
278 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, ...
6
votes
1answer
90 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 ...
5
votes
1answer
209 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
votes
1answer
484 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
votes
3answers
4k 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
189 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
votes
1answer
234 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
votes
2answers
120 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
votes
2answers
373 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
votes
1answer
154 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
votes
2answers
197 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
votes
1answer
589 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
1answer
82 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 ...
3
votes
2answers
168 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
votes
1answer
61 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
votes
1answer
65 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
votes
0answers
175 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
votes
2answers
134 views

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 ...
2
votes
1answer
74 views

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?
2
votes
1answer
85 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
votes
0answers
41 views

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 ...
2
votes
0answers
39 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
votes
0answers
153 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
votes
1answer
62 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
votes
0answers
228 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
vote
2answers
147 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 ...
1
vote
2answers
74 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 ...
1
vote
1answer
88 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 ...
1
vote
1answer
143 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
vote
1answer
18 views

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 ...
1
vote
1answer
117 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
vote
1answer
50 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
vote
1answer
618 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
vote
1answer
134 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 ...
1
vote
1answer
186 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
vote
1answer
91 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
vote
2answers
57 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
vote
1answer
147 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
vote
0answers
35 views

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 ...