Pareto efficiency with spatial rights

We investigate the problem of constructing a Pareto-efficient social welfare function that respects individual rights when preferences are defined over the location of a public facility. Restricting individual preferences to be either single-peaked or single-dipped, we find necessary and sufficient conditions for the existence of a Pareto-efficient social welfare function that respects individual rights.     

The social impact of advice during disability welfare reform: from social return on investment to evidencing public value through realism and complexity

ABSTRACT

This article illustrates how advice services create diverse public values within welfare reform. It develops a social impact framework using public value, realism, and complexity literature. Starting from a social return on investment study of advice, qualitative interviews are analysed with twenty-two clients, who sought advice for welfare benefits, and had disabilities, or physical or mental health conditions. Integrating these clients’ experiences with wider evidence illustrates how advice services advocated for people’s needs within a complicated (and controversial) welfare system. However, advice services face funding cuts, benefit assessment costs have risen, and welfare reforms have yet to meet their aims.     

The accuracy of changes of urban land values as a measure of social benefits from public programs

This paper extends the standard model of urban land rent to consider the impact of the output of public programs on the spatial equilibrium and to analyze the accuracy of changes of urban land values as a measure of social benefits from public investment. Two consistent output indicators of public investment are advanced: the individual's welfare and total land values. The general results of the comparative analysis are that there is a lack of correspondence between both output indicators, and that changes in land values are, in general, not an accurate measure of the benefits of such programs.     

Public education under capital mobility

The paper considers a two-country model of overlapping generations economies with intergenerational transfers motivated by altruism and investment in human capital. We examine in a non-stationary competitive equilibrium the optimal provision of education with and without capital market integration. First, we explore how regimes of education provision—public, private or mixed—arise and how they affect the dynamics of autarkic economies. Second, we study the effects of capital market integration, in equilibrium, on the optimal provision of education. Third, we show that capital market integration enhances government intervention in the provision of public education (to improve the welfare of its constituents) and consider various solutions to such a competition.     

中国电力产业竞争的消费者福利分析

本文借鉴“制度—结构—行为—绩效”（ISCP）分析范式分析电力市场竞争格局,并研究电力竞争政策的运行机制。同时,运用福利经济学工具,从电力竞争政策制定及施行的角度评估其对消费者剩余的直接影响。结果表明,2003—2014年,电力竞争政策总体上使消费者剩余增加。     

Economic juries and public project provision

Juries charged with evaluating economic policy alternatives are the focus of this study. The recruitment and management of juries is a principal-agent problem involving the design of incentive mechanisms for participation and truthful revelation of values. This paper considers a simple general equilibrium economy in which juries of consumers are used to estimate the value of public projects and determine their provision. The impact of participation fees on jury selection and representativeness, and on statistical mitigation of response errors, is analyzed. Manski set identification is used to bound selection bias and determine participation fee treatments that minimize welfare regret from imperfect jury findings.     

Do States Play Welfare Games?

This paper uses a panel of state-level annual data from 1983 to 1994 for each of the contiguous United States and the District of Columbia, to explore the degree to which states simultaneously set welfare benefits. Using instrumental variables estimation, we find substantial empirical evidence that is supportive of the notion of welfare competition. Furthermore, we find that state responses to neighbor benefit decreases tend to be significantly larger in magnitude as their responses to neighbor benefit increases. Our results, therefore, have potential implications for public policy in the wake of the increased decentralization of welfare policy associated with the welfare reform of 1996.     

国际资本流动与国际贸易关系:“Mundell模型悖论”

文章通过建立“Mundell模型悖论”模型,解释发展中国家对发达国家的投资对国际贸易的影响。分析得出的结论是:(1)发展中国家对发达国家的投资是贸易导向的;(2)应该以获取发达国家的先进生产技术为投资目的;(3)发达国家和发展中国家均能增加消费,增加各自的福利。文章最后给出了政策建议。     

The impacts of lending, race, and ownership on rental housing rehabilitation

This paper presents an empirical analysis of landlords' rehabilitation investment decisions in a large sample of buildings in one city—focusing on impacts of lending patterns, race, and ownership. The study finds that availability of loans from major institutional lenders—banks and savings and loans—in a neighborhood has a substantial independent impact on repair decisions, after controlling for a multitude of other neighborhood and building variables. For all landlords taken together, loan availability problems rather than owners' discriminatory attitudes seem to discourage some otherwise profitable repairs in black neighborhoods. But significant differences appear between owner-occupant landlords and others. After detailing these findings, the paper summarizes several policy directions they suggest.     

Public versus private provision of liquidity: Is there a trade-off?

To what extent is public debt private liquidity? Much policy advice given in the aftermath of the financial crisis rests on the assumption that increasing public debt relaxes borrowing constraints of private households. This is the case for ad-hoc debt limits, which are exogenous to public policy. Instead, if debt limits are fully endogenous, as e.g. in the case of the natural borrowing limit, public debt has no impact. We assume that borrowing limits arise because of limited contract enforceability and are therefore determined as equilibrium outcomes. Using an incomplete markets economy in which households are subject to uninsurable earnings shocks, we show that public debt provides some liquidity, but less so than it would if constraints were imposed ad-hoc. We show that generating borrowing constraints as an equilibrium outcome substantially alters the answers to other important questions, such as for the welfare effects of government debt or its impact on real economic activity.     

The Financing of Investment in Utility Assets

This article concerns appropriate ways to finance investment in quasi‐public assets, such as those of utilities. Pursuing the principle of charging the user, analogies are drawn with not‐for‐profit investment, dedicated to the service of users. Focusing on intergenerational equity, an arguably typical pattern of intergenerational investment transactions is identified and proposed as a financing norm. It is shown that, while an investing generation will always experience a real resource cost, the burden can be alleviated in welfare terms if all new investment is financed by borrowing. Charges or taxes levied for maintenance and replacement of assets offer scope for improving the intergenerational welfare balance.     

The contribution of research and innovation to productivity

This paper examines the impact of investment in research and innovation on Australian market sector productivity. While previous studies have largely focused on a narrow class of private sector intangible assets as a source of productivity gains, this paper shows that there is a broad range of other business sector intangible assets that can significantly affect productivity. Moreover, the paper pays special attention to the role played by public funding for research and innovation. The empirical results suggest that there are significant spillovers to productivity from public sector R&D spending on research agencies and higher education. No evidence is found for productivity spillovers from indirect public funding for the business enterprise sector, civil sector or defence R&D. These findings have implications for government innovation policy as they provide insights into possible productivity gains from government funding reallocations.     

Some Unintended Consequences of Parallel Trade in Pharmaceuticals

It is widely argued that international arbitrage, or parallel trade (PT), in patented drugs may increase consumer surplus in the relevant countries but at the expense of R&D investment. We show how the effects of PT depend on the vertical contract (linear pricing or dual pricing) between the manufacturer and the foreign licensee or distributor and on whether and how drug prices are regulated and reimbursed. We find that, contrary to what policy makers generally predict, we should be more concerned with the impact of PT on aggregate consumer surplus than on R&D investment. Copyright © 2014 John Wiley & Sons, Ltd.     

Long-run growth and welfare effects of public policies with distortionary taxation

In a one-sector growth model with infrastructure investment, we study the impact of fiscal policies on growth. The government collects taxes on labor income and profits. The government uses these revenues to purchase infrastructure investment, provide utility enhancing government services, and to provide transfer payments to the households. We show that the balanced growth rate is an increasing function of the percent of government revenues that goes to infrastructure. We find that the growth maximizing mix of taxes depends on the elasticity of substitution between inputs. In particular, with distortionary taxes, the growth maximizing tax rate on capital is higher the lower the elasticity of substitution between private physical capital and public capital. In addition, the growth maximizing size of the government is higher when the elasticity of substitution between public and private inputs is low. We also investigate welfare effects of other public expenditures as well. Depending on the elasticity of substitution in production, the welfare implications of different public policies can be substantial.     

FDI spillovers and firm productivity during crisis: Empirical evidence from transition economies

Most studies on foreign direct investment (FDI) are nested within periods of economic prosperity. Our study investigates the impact of FDI spillovers on productivity during the global financial crisis (2006–2014) and the accompanying credit shortage. A dynamic panel analysis of firm-level data from two neighbouring but distinct transition economies, Croatia and Slovenia, reveals that the impact of the crisis may go as far as halting the process of learning through spillovers if firms have difficulties in accessing external funds. The implications of the study may prove particularly beneficial to policy makers grappling with the economic crisis following the COVID-19 pandemic.     

区域投资环境竞争力的模糊综合评价研究

区域投资环境竞争力是一个区域的总体投资环境对投资的吸引力。文章引入区域投资环境竞争力概念,在此框架内从系统论出发,筛选了一系列有关指标,建立了区域投资环境竞争力评价指标体系,并基于模糊评价理论构建了区域投资环境竞争力综合评价模型,为投资者进行投资决策提供了一个很有效的工具。     

False promises of co-production in neighbourhood regeneration: the case of Dutch community enterprises

Many European countries are implementing austerity measures alongside trends of welfare state retrenchment. Entrepreneurial forms of active citizenship are considered as a new form of public management to fill gaps left by spending cuts and to continue neighbourhood regeneration. Inspired by British practices, Dutch citizens are trying to set up community enterprises (CEs) to provide services or other benefits for residents in deprived neighbourhoods. Based on a qualitative panel study, this article reveals supportive responses but also resistance from local governments and housing associations. Within a positive policy discourse on co-production, institutional responses often encompass forms of ‘counter-production’ that hold CEs in full uncertainty about crucial conditions for their business.     

Optimal regulation of technical progress in natural monopolies with asymmetric information

The focus of this paper is to characterize regulatory mechanisms for natural monopolies to provide for optimal technical progress when information is asymmetric. We model a Bayesian-Nash game where the monopolist has private knowledge of the cost-reducing effects of R&D investment to generate process innovations. In the first case, a price-regulated, profit-maximizing firm whose R&D level is unobservable sets its R&D level efficiently to maximize profits at the output level chosen by the firm. However, the level of technical progress achieved by the firm in this case is too high from the regulator's point of view since, in the second-best regulated solution of interest, the regulator has to provide for the R&D expenditures, assumed sunk, as well as for information rents transferred to the firm. In a second case, it can be shown that if the regulator can observe and set limits on the firm's investment in R&D, social welfare is improved, even though the regulated investment level is no longer efficient at the output level chosen by the firm. The reason for the welfare improvement is that losses in consumer surplus due to a decrease in output and an increase in the price are offset by a decrease in information rents and R&D costs transferred, causing the social costs of public funds to fall. Received: 31 July 1994 / Accepted: 15 January 1999     

Welfare targeting in networks

This paper investigates welfare targeting for public goods in networks. First, we show that a tax/subsidy scheme (not necessarily budget-balanced) affects each consumer only insofar as it affects his neighbourhood. Second, we show that either a Pareto-improving income redistribution can be found or there exist Negishi weights, which we relate to the network structure. Third, in the case of Cobb–Douglas preferences, we show that a Law of Welfare Targeting holds and links two well-known notions of the comparative statics of policy interventions: neutrality and welfare paradoxical effects. Collectively, our findings uncover the importance of the $-1$ eigenvalue to economic and social policy: it is an indication of how consumers absorb the impact of income redistribution.     

House prices and consumer welfare

We develop a new approach to measuring changes in consumer welfare due to changes in the price of owner-occupied housing. In our approach, an agent's welfare adjustment is defined as the transfer required to keep expected discounted utility constant given a change in current house prices. We demonstrate that, up to a first-order approximation, there is no aggregate change in welfare due to price increases in the existing housing stock. This follows from a simple market clearing condition where capital gains experienced by sellers are exactly offset by welfare losses to buyers. We show that this result holds (approximately) even in a model that accounts for changes in consumption and investment plans prompted by current house price changes. There can, however, be changes in welfare due to additions to the stock of housing, or to changes in the price of renovating and upgrading the existing stock of housing. For the United States, we estimate the welfare cost of house price appreciation to be an average of $127 per household per year over the 1984–1998 period.