Who should bear the resource cost of electronic transaction?

Using a search theoretic model of money, we examine an optimal allocation of the resource cost of electronic transaction. A transaction using cash incurs a buyer its carrying cost, while an electronic transaction incurs data-processing cost to the payment platform which then raises the resource cost from buyers or sellers using the electronic payment system. An equilibrium allocation of the resource cost implies the seller-take-all-burden scheme by which the payment platform can maximize the volume of electronic transactions by raising the resource cost only from sellers. However, the socially optimal allocation of the resource cost implies the buyer-take-all-burden scheme by which the resource cost should be raised only from buyers in order to maximize welfare.     

Who should be precautionary? Governance of nanotechnology in the risk society

This article focuses on one important ethical and political element in the development of nanotechnologies: the relevance and importance of the precautionary principle. The principle recommends political actions based upon experiences and early scientific warnings, even when there is no clear scientific evidence to prove causal links. Our chief contribution to the discussion about the precautionary principle in nanotechnologies is the development of the stakeholder approach in a governance perspective. We link our article to the theoretical and empirical discussions on risk society. In at least two ways the risk society of Ulrich Beck seems highly relevant for the precautionary principle within nanotechnologies: Precautionary actions represent one model for the society to deal with modern risks; and Beck redefined the relation between science and society. This article is based upon qualitative interviews with four groups of stakeholders in Norway: (1) non-governmental organizations—consumer, environment, health; (2) political authorities and politicians; (3) industry and businesses; and (4) the scientific community. In the present phase of the development of nanotechnologies, the responsibility for taking precautionary actions are, to a large extent, placed on the individual researcher and the scientific community. We have identified seven issues in the interviews that are pertinent for the scientific and political discourse about nanotechnologies.     

Dynamic analysis of bribery firms’ environmental tax evasion in an emissions trading market

Using an R&D-based growth model with dual regulation, we analyse how environmental policies influence pollution, corruption, a growth rate, and welfare. Considering that polluting firms bribe bureaucrats to evade paying environmental tax, we find that a stricter environmental tax leads to a decrease in growth rate via a decrease in the permit rent as well as an increase in pollution and corruption per firm and results in worsening households’ welfare and in improving the bureaucrats’ welfare. Thus, tax evasion with corruption improves households’ welfare and worsens the bureaucrats’ welfare. Our findings imply that tax evasion under dual regulation improves social welfare.     

A process perspective on regulation: Who bears the dispersed costs of regulation?

Scholars in both Austrian Economics and the Public Choice tradition intuitively understand that intervention often creates redistribution from lower income households to the middle class, but there has been little systematic inquiry into the distributional consequences of interventionism. This paper systematically applies Austrian insights to the dispersed costs side of the analysis of intervention to offer a better sense of how large those costs may be and who tends to bear them. An emergent literature on the regressive effects of regulation highlights those distributional consequences both from a theoretical and an empirical perspective.     

Who pays for minor league training costs?

As an alternative to monopsonistic exploitation, the underpayment of players in major league baseball may be explained as the attempt by owners to recoup general training expenses. In this article, a method is proffered for estimating the 'surplus' extracted from those players restricted by the reserve clause, where this surplus is defined as the difference between what the player is actually paid and what he would have received if he were a free agent. These estimates are then used to examine how the surplus varies across players. The results suggest a number of interesting aspects of the recovery of minor league training costs, monopsony exploitation, and the distribution of the surplus across players. First, owners only extract a surplus from 'apprentices' (i.e., those young players who are ineligible for salary arbitration). Second, the largest surpluses are extracted from those who cost the least to train. In fact, the surplus generated by star apprentices is about twice that of mediocre apprentices. Finally, the results suggest that the surplus extracted from minority apprentices is 10–15% higher than that extracted from white apprentices.     

Who pays the high health costs of older workers? Evidence from prostate cancer screening mandates

Between 1992 and 2009, 30 US states adopted laws mandating that health insurance plans cover screenings for prostate cancer. Because prostate cancer screenings are used almost exclusively by men over age 50, these mandates raise the cost of insuring older men relative to other groups. This article uses a triple-difference empirical strategy to take advantage of this quasi-random natural experiment in raising the cost of employing older workers. Using Integrated Public Use Microdata Series data from the March Supplement of the Current Population Survey, I find that the increased cost of insuring older workers results in their receiving 2.8% lower hourly wages, being 2% less likely to be employed and being 0.7% less likely to have employer-sponsored health insurance.     

Who are the members of the international club?

This article proposes pragmatic methods that incorporate recent contributions to public good theory to identify the members of the international club and how they select new members. This article also suggests simple applications to the recent problems in international clubs such as the euro and NATO.     

Does size asymmetry exacerbate the inefficiency of tax competition?

Many authors demonstrate that the tax gap resulting from tax competition increases with the size asymmetry of the competing countries. Consequently, increasing country-size disparities exacerbates the inefficiency of tax competition. The aim of this note is to show that this classical view has no general validity, if we consider that countries compete not only in taxes, but also in the provision of infrastructure. The simple model we develop for this purpose demonstrates that the effect of size disparity on efficiency depends crucially on the degree of international capital mobility.     

Who participates in tax avoidance? Evidence from Swedish microdata

This article empirically examines why not all individuals participate in tax avoidance. We use rich Swedish administrative panel data on all taxpayers, with a link between corporate and individual tax returns and document that few individuals utilize legal and observable tax avoidance opportunities. Our results show that there are several frictions in tax avoidance participation. In addition to monetary benefits from tax avoidance (incentives), the opportunity to participate in tax avoidance (access), as well as information and knowledge about these opportunities (awareness), are important factors for the individual’s tax avoidance decision. We further show that tax avoidance spreads within communities. The impact of the local network is stronger for non-commuters who live and work in the same municipality.     

Is the optimal income tax regressive?

A class of solutions that violates the standard results on the sign and shape of optimal tax-rates is shown to be less exceptional than what might be expected, thus casting doubt on the general necessity of qualitative features of income tax-schedules accepted heretofore.     

Equalizing tax bases or tax revenues under tax competition? The role of formula apportionment

This paper contributes to the literature on fiscal equalization and corporate tax competition. The innovation is that we explicitly model multinational enterprises and a corporate tax system that is designed according to formula apportionment. Two main results are obtained. First, in contrast to previous studies we identify cases where tax revenue equalization is better in mitigating detrimental tax competition than tax base equalization. Second, tax base equalization nevertheless has the advantage that it may render tax rates efficient, depending on the shape of the apportionment formula. A pure payroll formula does not ensure efficiency, but a back‐of‐the‐envelope calibration of our model to Canadian provinces suggests that a pure sales formula may be optimal.     

The benefits and costs of ethanol: an evaluation of the government’s analysis

Ethanol production in the United States has been steadily growing and is expected to continue growing. Many politicians see increased ethanol use as a way to promote environmental goals, such as reducing greenhouse gas emissions, and energy security goals. This paper provides a benefit-cost analysis of increasing ethanol use based on an analysis by the Environmental Protection Agency. We find that the cost of increasing ethanol production to almost ten billion gallons a year is likely to exceed the benefits by about three billion dollars annually. We also suggest that earlier attempts aimed at promoting ethanol would have likely failed a benefit-cost test, and that Congress should consider repealing ethanol incentive programs, such as the ethanol tariff and tax credit.      

Cournot duopoly and environmental R&D under regulator’s precommitment to an emissions tax

This study examines the environmental R&D (E-R&D) of Cournot duopolists with end-of-pipe technology under a regulator’s precommitment to an emissions tax. Under technological spillover effect, the government invariably prefers E-R&D cartelization to E-R&D competition. Highly contrary to earlier studies, consumer surplus is not necessarily maximized by environmental research joint venture cartelization, although this offers private and social incentives.     

In or out: efficient inclusion of installations in an emissions trading scheme?

Regulators around the world are currently considering national emissions trading schemes (ETS) as cost-effective instruments to reduce greenhouse gas emissions. In the process, they are confronted with numerous design issues. The coverage of installations in an ETS is one such issue. While “blanket coverage” that includes all industrial emitters of greenhouse gases in an economy has some intuitive appeal, and seems equitable, it does not take into full account all the costs related to the extent of coverage. This paper shows that an alternative approach of “partial coverage” based on benefit–cost analysis can achieve the same emission reduction outcome at lower social cost. The approach is based on maximizing the benefits from inclusion of installations in an ETS at the same time as taking all relevant transaction costs into account. A broad definition of transaction costs is used, which covers the regulatory costs to the government as well as regulatory costs imposed on covered installations. We find that particularly for relatively modest emissions reduction targets the cost savings of a “partial coverage” compared to “blanket coverage” are significant.     

Who has terror angst? Perceptions of the effects of terror on the world economy

We examine sources of biased terror perceptions. In particular, we investigate how international experts of the IFO World Economic Survey assess the effect of terror on the world economy and the economy of their own country. The results show that respondents from terror-stricken countries have more favourable views on the effect of terror on the word economy (but not on their own countries). Male respondents and those from democratic and richer countries are likewise more optimistic.     

Estimation of the value of the marginal product of emission in a country where emissions output is regulated — an empirical study

Emissions resulting from the production process can be characterized as use of the elimination and disposal services of the ecological system. Hence, they are use of natural resources and thus an input to production. The present paper discusses an approach to evaluate the returns of these kind of services as a production factor.First, four main types of industrial emission are chosen —SO₂,CO₂,NO_xandparticulate matter — and integrated in a Cobb-Douglas production function. With this approach, the production elasticities and the marginal product of these types of emission can be estimated.Based on these results and assuming that marginal product equals price, the demand curve for emission is estimated. With this demand curve the consequences of different kinds of environmental policy are considered. Under further assumptions of optimal behaviour it can be shown that the demand curve for emission is equal to the curve of marginal costs of avoidance (MCA). Thus, the estimates of the demand curves can be considered as estimates of the MCA-curves. Furthermore the price elasticities of these four types of emission are estimated with this approach. The method used in the paper is suggested for calibration of CGE models.