ENVIRONMENTAL ECONOMICS AND THE SOCIAL COST OF SMOKING

A widely prevailing assumption is that taxing and regulating smoking are justified on efficiency grounds since smokers impose a significant cost on others. Supposedly, the same economic analysis that has been used to justify taxing and regulating environmental pollution also applies to smoking. But two serious problems undermine the efficiency argument for taxation and regulation to internalize the cost of smoking. First, the largest external cost that smoking supposedly generates does not exist. Second, even if smoking does generate an external cost in the form of environmental tobacco smoke, one cannot justify either taxing or regulating smoking when one properly applies the principles of environmental economics.     

THE COST OF SOCIAL PACTS

The paper deals with the various institutions capable of improving the macroeconomic performance in a situation of conflict between unions and the government. In particular, we discuss the difficulty of agreeing with a cooperative solution and the need for some kind of explicit or implicit compensation for unions in signing a social pact. A cooperative solution encapsulating the operation of the different mechanisms designed to cope with the conflict and including the various elements of compensation is presented. The model shows that the amount of the explicit compensation depends on the extent of the strategic conflict between the parties as well as on the factors that determine the implicit compensation (i.e., unions’ inflation aversion, partisanship) or are partial substitutes for it (i.e., the conservative central banker). Finally, the role played by external anticipated and unanticipated shocks is also discussed.     

RENT DISSIPATION AND THE SOCIAL COST OF PRICE POLICY

This paper uses a general equilibrium-based exchange economy model to examine rent seeking for a price policy. Opposing interests spend resources to influence the government's choice of a price vector. Rents, the willingness to pay for the policy, are determined endogenously from the Nash equilibirum of a non-cooperative game. Numerical simulations explore the degree to which rents are dissipated by wasteful rent seeking. It is found that dissipation, measured as the ratio of rent-seeking costs to rents garnered, can grow without limit, and is greatest when opponents are evenly matched. Dissipation is smallest with widely disparate groups, a result that might help explain the underdissipation that seems to occur in many industries.     

THE ECONOMICS OF SOCIAL SENTIMENTS: THE CASE OF ENVY

The widespread externality produced by the sentiment of envy is modelled in this paper. We show its specific structural properties, the conditions of its existence, the various reasons for its normative relevance, the basic tool of its analysis ("envy-free preferences") and its crucial relation with the property of equality of liberty ("equity"). We then show that the envy externality respects the efficiency of classical allocative processes in the relevant conditions (competitive markets with not too unequal incomes, cases with indivisibilities, equal-freedom individual choices, etc.). We in particular derive conditions of consistency between efficiency and the vanishing of the envy externality, as well as the effects of actual envy on "divide and choose" processes, preferences to reassignment, multidimensional maximin, "egalitarian equivalence", degrees of envy in society and the rationality of choices.     

THE SIGNIFICANCE AND USE OF LONG-RANGE ACTUARIAL COST ESTIMATES FOR THE SOCIAL SECURITY SYSTEM

This paper describes the methodology underlying the actuarial cost estimates for the Social Security program and the assumptions needed therefor. With this as a background, the use to which these estimates is made in developing legislation is described, with emphasis on the current financing problems. Finally, various possible solutions to these problems are discussed. These solutions involve either increasing the income of the program or decreasing the rate of growth of its outgo. Increased income could be derived by increasing the payroll tax rates, by injecting general revenues (either directly or indirectly, such as taxing Social Security benefits and putting the proceeds in the trust funds or financing part of all of the Hospital Insurance program from general revenues and moving some of its payroll tax rate to the cash-benefits program), or by covering government employees who are not now covered. The growth of outgo could be reduced by changes in the cost-of-living adjustments of benefits, by gradually increasing the normal retirement age, or by gradually decreasing the relative benefit level     

DECREASING CAMPUS SMOKING WITH PUNISHMENTS AND SOCIAL PRESSURES

This paper reports the effectiveness of a Midwest state university's “100% tobacco‐free” policy. The policy used social pressures and punishments to incentivize tobacco users to no longer consume tobacco on campus. The policy had three distinct periods (Pre‐Promotion, Post‐Promotion, and Post‐Policy). Social pressures and punishments were introduced during the Post‐Promotion and Post‐Policy periods, respectively. Changes in cigarette consumption were inferred by counting the number of cigarette butts found at various locations on campus. A statistically significant decrease in the number of cigarette butts was observed during the Post‐Promotion period. After the initial drop, tobacco use remained constant for the remainder of the period. An additional decrease was observed once punishments were introduced in the third period. However, the number of cigarette butts observed on campus remained significantly above zero. Further research is needed to understand how smokers substitute across time, location, and tobacco products after the implementation of similar policies. (JEL I11, C99, I12)     

OPTIMAL INCOME TAXATION,DYNAMIC EFFICIENCY,AND THE SOCIAL COST OF PUBLIC EXPENDITURE*

An interest income tax and a publicly provided private good are introduced into the Hamada overlapping-generations model consisting of heterogeneous individuals where the government can use a wage-income tax, an identical lump-sum transfer, and the public debt. Two interesting problems are studied: (a) what relation exists between the optimal interest rate and the population-growth rate and (b) how dynamic efficiency affects the optimal-decision rules of taxes and the publicly provided good. We show that (i) if the government can (not) tax the interest income, then the optimal interest rate is (not) equal to the population-growth rate, (ii) without the availability of the interest tax the difference between these two rates is mainly caused by the income-distribution effect of the public debt and (iii) the dynamic efficiency effects on the optimal rules of the wage tax and the publicly provided good depend on not only such a difference but also the average substitute-complement relations among leisure, the second-period consumption and the publicly provided good.     

发展经济学的本质特征与中国特色发展经济学的构建

当代西方发展经济学微观化把发展经济学研究引入歧途。发展经济学本质上属于宏观经济研究领域,主要研究方法是长期动态演变方法,主要研究思路是结构性和综合性分析。西方发展经济学无法解释当代中国经济发展问题,构建具有中国特色的发展经济学是历史的呼唤,时代的期盼。构建中国特色发展经济学应以历史唯物主义为指导,以中国特色社会主义理论体系为指南,以新发展理念为理论框架。     

TIME AND THE COST OF CHILDREN

This paper uses the "adult goods" method to estimate the full costs of children. Full costs include both expenditure and time costs. Adult personal time (comprising pure leisure, sleep and other personal care) is used as the adult good. Previous research has shown that the presence of children in the household leads to a reduction in adult personal time. This paper develops a simple economic model of the household to show how this information can be used to develop an equivalence scale for adult consumption that takes account of both the expenditure and time costs of children. Preliminary estimates using Australian data suggest a very large cost—much higher than that typically assumed for expenditure costs. The full cost of children declines with age, despite the expenditure cost rising. The paper discusses the limitations of the adult good method and the assumptions needed to draw welfare conclusions from these and other estimates of child costs.