Indirect Tax Reform in Australia: The Welfare Effects on Different Demographic Groups

The welfare effects of several indirect tax reforms in Australia are examined for a number of types of household in a range of income groups. The welfare changes, measured using equivalent variations, are based on the use of the linear expenditure system, where parameters are different in each of the income groups. The effects of the current system and of several reforms are found to differ significantly among the household types. However, the results suggest that the extent of vertical redistribution involved in the current indirect tax structure, and possible reforms to it, are small. The role of exemptions are examined in the case of food, for which the budget shares are systematically higher in lower income households, and health services. In view of the strong assumptions used at each stage, the results must be regarded as tentative.     

Expenditure function estimates of the efficiency and distributive impact of indirect taxes in the United Kingdom

This paper uses the expenditure function to consider the efficiency and distributional impact of indirect taxes in the United Kingdom. Estimates of the parameters of the Linear Expenditure System of demand equations are employed to measure the compensating variation and equivalent variation costs of taxes on households in different income groups. In addition, distributional weights are used to consider the overall impact of different taxes and tax changes on social welfare. Finally we consider other types of demand system estimates which might be used in this kind of exercise.     

Wealth Effects and the Valuation of Common Access Facilities: Some Calculations*

Using a CES utility function modified to allow for zero usage of one commodity, this paper calculates the relative difference between compensating and equivalent variation measures of the welfare loss due to withdrawal of a commodity, for various plausible values of the relevant demand function parameters (income elasticity, expenditure share and substitution elasticity). Contrary to what is frequently asserted these differences can be quite significant     

MEASUREMENT OF POVERTY: POLAND IN THE 1980s

This paper presents results of an examination of poverty in Poland in the 1980s. The individual welfare measure is expenditure on consumption per equivalent adult. Household equivalence scales are estimated using a quasi-exact scales trans logarithmic model. Four poverty indices are calculated. These are intended to capture the following aspects of poverty: (1) incidence, (2) relative deprivation, acid (3) social ability to eliminate poverty by income transfers. The study revealed significant changes in poverty during the investigated period, from 9 to 30 percent with persistent poverty resulting for pensioners, farmers and low educated persons.     

Welfare Measurement and Measurement Error

The approximate effects of measurement error on a variety of measures of inequality and poverty are derived. They are shown to depend on the measurement error variance and functionals of the error–contaminated income distribution, but not on the form of the measurement error distribution, and to be accurate within a rich class of error–free income distributions and measurement error distributions. The functionals of the error–contaminated income distribution that approximate the measurement error induced distortions can be estimated. So it is possible to investigate the sensitivity of welfare measures to alternative amounts of measurement error and, when an estimate of the measurement error variance is available, to calculate corrected welfare measures. The methods are illustrated in an application using Indonesian household expenditure data.     

THE STANDARD OF LIVING IN THE UNITED STATES

A common approach to the evaluation of the standard of living is based on a function of real income. In the United States this often takes the form of CPI-deflated mean household income. Material well-being is more appropriately evaluated using a consumption-based index. Using data from the Consumer Expenditure Surveys we find that real mean income provides an inaccurate representation of the level and trend of the standard of living relative to real per equivalent total expenditure in the postwar United States. The differences between real income and real total expenditure per household equivalent member are found at all levels of aggregation.     

Multidimensional Inequality Across Three Developed Countries

This paper produces comparable estimates of multidimensional inequality for the U.S., Germany, and Australia. Two alternative approaches with differing interpretations are employed. The first method projects all facets of welfare onto a single variable which is then analyzed using standard univariate techniques. The second approach establishes equivalent‐income distributions that would lead to an equalization of welfare, such that the difference between this counterfactual and the true income distribution can be measured. This difference is then interpreted as the degree of income redistribution required to offset welfare inequality. Using data on permanent incomes, health scores, years of education, and leisure times, we observe much higher levels of inequality in the U.S. than in Germany or Australia. Our results are highly statistically significant and hold over a large variety of weighting specifications.     

DISTRIBUTIONS OF REAL INCOME: WITHIN COUNTRIES AND BY WORLD INCOME CLASSES

Income and expenditure data from 14 countries (representing one-third of the world's population), mostly from the 1970s, are used to construct national income distributions and , after normalizing by purchasing power parities, to construct a "world" distribution of real income. The density of real-income equivalent groups (socio-economic classes) across countries is measured for the "affluent," the "well-off," and the "poor." In comparison with earlier studies, most national distributions of income seem to have been improving, the numbers of those in poverty (based on real income) are lower, and, most important (and disturbing for some) is that the "affluent" class (and those above "middle class" income levels) has (prematurely) swelled in a number of developing countries.     

收入分配不平等对刑事犯罪的影响

本文利用1988—2006年中国省级面板数据,采用动态面板数据估计了收入分配不平等对刑事犯罪率的影响。研究发现,控制跨省人口迁徙、福利支出、失业率等因素并作相关的稳健性检验以后,以基尼系数度量的收入分配不平等上升1个百分点,刑事犯罪率将至少上升0.185个百分点,并且收入不平等程度不断上升会导致政府增加福利支出以降低刑事犯罪率;城市化会导致刑事犯罪率上升;提高人力资本水平和增加福利支出都会对遏制犯罪发挥重要影响。     

Public Hospital Expenditure: How Is It Divided between Lower,Middle and Upper Income Groups?

Public expenditure on hospitals through the Australian Medicare system plays an important role in the social wage. However, relatively little is known about the distribution of hospital benefits and, in particular, the differences in expenditure on different income groups. Accordingly, in this study, public expenditure on hospitals is examined using a combination of data sources rich in information on hospital use and expenditure, health status and socioeconomic characteristics. It was found that public expenditure on hospitals was very pro-poor, with persons in the lowest income quintile receiving five times the expenditure of persons in the top quintile. However, expenditure on individuals admitted to hospital varied markedly within income groups. People in the lowest income quintile were found to attract the greatest expenditure because they were older, sicker, had a higher risk of hospitalisation, were least likely to be insured and most likely to be admitted to a public hospital.     

Expenditure taxes,income taxes,and time-inconsistency

Traditional welfare-based comparisons of different tax structures implicitly assume that the government can precommit to its future optimal policy. When optimal tax rates are time- inconsistent, however, such comparisons may be misleading. This paper uses a two-period representative-consumer optimal taxation model to study the implications of time-consistency for the welfare rankings of expenditure and income taxation. I show that the welfare rankings of optimal policies may not be preserved by time-consistent ones.     

Tax Havens,Growth, and Welfare

This paper develops an endogenous growth model featuring tax havens, and uses it to examine how the existence of tax havens affects the economic growth rate and social welfare in high‐tax countries. We show that the presence of tax havens generates two conflicting channels in determining the growth effect. First, the public investment effect states that tax havens may erode tax revenues and in turn decrease the government's infrastructure expenditure, thereby reducing growth. Second, the tax planning effect of tax havens reduces marginal cost of capital and hence encourages capital accumulation so as to spur economic growth. The overall growth effect is ambiguous and is determined by the extent of these two effects. The welfare analysis shows that tax havens are more likely to be welfare‐enhancing if the government expenditure share in production is low, or the initial income tax rate is high. Moreover, the welfare‐maximizing income tax rate is lower than the growth‐maximizing income tax rate if tax havens are present.     

转型期国有资本收益的公共福利性支出

国有资本收益支出结构取决于经营投资性支出与公共福利性支出对全民福利之边际贡献比较.一方面,随着经济的发展和转型.我国总的公共福利性支出参照国际水平,已严重滞后于自身的经济发展程度及社会公共需要.与这一转型相伴的是我国个人收入差距的扩大,要求扩大政府支出;另一方面,人均资本积累水平的提高以及国有资本盈利能力的增强为国有资本收益适量用于公共福利性支出提供了条件.从操作层面来说,各级政府的国有资本收益用于公共福利性支出比例应由全国人大来决定,且用于公共福利性支出的部分应上交中央财政、全国统筹使用.     

Optimal taxation over the life cycle

We derive the optimal labor income tax schedule for a life cycle model with deterministic productivity variation and complete asset markets. An individual chooses whether and how much to work at each date. The government must finance a given expenditure and does not have access to lump sum taxation. We develop a solution method that uses the primal approach to solve for the optimal non-linear tax function. The average tax rate determines when an individual will work while the marginal tax rate determines how much she will work. Even in the absence of redistributive concerns, the optimal tax schedule has an increasing average tax rate at low levels of income to encourage labor market participation. The marginal tax rate at the top is strictly positive. Finally, the model is used to assess the effects of changing the current tax schedule to the optimal one. Under the preferred parameters, this delivers a welfare gain equivalent to 0.67 percent of lifetime consumption.     

The Optimal Linear Income Tax Model: Utility or Equivalent Income?

This paper compares the use of equivalent income with that of utility, in the social welfare function, in optimal income tax models. Equivalent income is a money metric welfare measure that, unlike utility, is not affected by monotonic transformations of utility. The use of equivalent income is found to produce an optimal tax rate that is more sensitive to the degree of inequality aversion, compared with the use of utility. With Cobb-Douglas and CES utility functions, the optimal tax rate is the same for utility and equivalent income where relative inequality aversion is unity. When using equivalent incomes, the case for high marginal rates does not depend on the assumption of a very low elasticity of substitution between consumption and leisure.     

The random expenditure function approach to welfare in RUM: The case of hazardous waste clean-up

This paper presents an application of the random expenditure function approach for welfare analysis in RUM with a non-linear income effect. The measures of expected compensating variation (CV) are first derived as special cases to apply to a two-option conjoint choice-based survey data aimed at deciphering homeowners’ willingness to pay for hazardous waste clean-up. A comparison of the expected CV with the CV based on the representative consumer approximation (CVr) reveals high degree of agreement between the estimates. Using the Diewert and Translog utility specifications the study finds that regardless of the methodology used, welfare estimates are quite sensitive to the functional forms.     

The Marginal Cost of Australian Income Taxation*

When the financing of expenditure programmes involves a welfare cost, that cost should be considered part of the opportunity cost of the expenditure programme. In this paper, we explore some concepts of the welfare loss of taxing labour income. We correct some measures previously applied and estimate the marginal cost of Australian public funds. Using our measure of the cost of public funds, we explore the costs of policy options in the motor vehicle industry.     

The trend of welfare disparity among subgroups of population in Australia 1983-1984 - 1993-1994

The aim of this paper is to estimate the trend of social welfare for Australia using 1983–1984, 1988–1989 and 1993–1994 Household Expenditure Survey data. The functional form of the Social Welfare Function (SWF) was derived by Sen, Degum, Yitzhaki and Shesinski (all independently). Since the function contains the Gini coefficient as the inequality parameter, it could not be formally disaggregated by subgroups of population. This paper, using a method of subgroup decomposition of the Gini coefficient developed by Podder, attempts to disaggregate the SWF. With this method it is now possible to identify disadvantaged groups by their relative shares in total welfare. In addition the method is used to determine effect of economic growth on specific subgroups, and in turn, on total social welfare. This study is based on the Australian economy. Distribution of relative shares of total social welfare among various regional groups are identified, groups determined by occupational status and groups determined by country of birth. The effect on society's welfare for a percentage change in income of a group and the trend of relative welfare of a specific group are also computed. This information can be used in a variety of social decision making situations, including cost benefit analysis.     

食品价格上涨对城镇家庭消费与福利影响研究——基于EASI模型

文章基于与2015年度诺贝尔经济学奖得主迪顿的接近理想需求系统 AIDS 来源相同的EASI需求系统 ,采用CHNS调查数据 ,运用 EASI需求系统实证分析了各类食品价格上涨对不同收入等级城镇家庭消费与福利的影响 ,并比较了收入补贴与价格补贴的经济效果.研究发现:(1)我国城镇居民动物性食品消费支出占食品总支出的比重最大 ,其次是粮食和蔬菜 ,城镇居民的食品消费结构为"动物性食品+粮食+蔬菜" ,这说明动物性食品价格上涨对我国城镇居民日常膳食消费的影响相对较大.(2)粮食价格对困难户和最低收入家庭的福利影响最大 ,动物性食品价格对较低收入家庭的福利影响最大.(3)对低收入家庭而言 ,当动物性食品价格上涨时 ,收入补贴政策的效果优于价格补贴政策 ;当粮食价格上涨时 ,价格补贴政策的效果优于收入补贴政策.文章最后从生产、补贴政策和分配制度的角度提出了政策建议.     

Fiscal policies, environmental pollution and economic growth

This paper develops a model of endogenous economic growth with special consideration to the role of productive public expenditure and environmental pollution; and analyses the properties of optimal fiscal policy in the steady state growth equilibrium. We consider the level of consumption as the source of pollution. Government allocates its tax revenue between pollution abatement expenditure and productive public expenditure. Optimum ratio of productive public expenditure to national income is equal to the competitive output share of the public input, when productive public expenditure is depicted as tax revenue minus abatement expenditure. However, the proportional income tax rate exceeds the competitive output share of the public input. There is no conflict between the social welfare maximizing solution and the growth rate maximizing solution in the steady state growth equilibrium. The unique steady state growth equilibrium appears to be a saddle-point when the growth rate is above a critical level and the steady state equilibrium growth rate in the market economy is not necessarily lower than the socially efficient growth rate.