EVALUATING IMPACT EFFECTS OF TAX REFORMS

Abstract. This survey paper provides coverage of the inputs from the theory side which go into the empirical analysis of impact effects of tax reforms. Inequality, social welfare, progressivity and horizontal inequity effects are considered. The value judgements inherent in selecting the target group for analysis, specifying welfare through household utility, equivalizing incomes and otherwise incorporating differences in household needs into utilitarian analysis, are all explained. The evaluation procedures described include dominance checks and index comparisons. The inequality and social welfare tests are also applicable to other comparisons of income distribution. Standard computer software to sort, cumulate and compute covariances is all that is required to undertake the necessary computations using microdata.     

NONLINEAR GROWTH EFFECTS OF TAXATION: A SEMI‐PARAMETRIC APPROACH USING AVERAGE MARGINAL TAX RATES

One of the major challenges of empirical tax research is the identification and calculation of appropriate tax data. While there is consensus that average marginal tax rates are most suitable for studying the effects of tax policy on economic growth, because of data limitations the calculation of marginal tax rates has been limited to the USA and the UK. This paper provides calculations of average marginal tax rates for the four Scandinavian countries using the methodologies of Seater (1982, 1985) and Barro and Sahasakul (1983, 1986). Then, by pooling the newly calculated tax rates for the Scandinavian countries with the data for the USA and the UK, we investigate the effects of tax policy shocks on the per capita GDP growth rate. Our results suggest that an increase in average marginal tax rates has a negative impact on economic growth. Employing additive mixed panel models with penalized splines as estimation approach, we show that changes in tax rates have nonlinear effects. Increasing average marginal tax rates turn out to be the most distorting at relatively moderate tax rates. Copyright © 2013 John Wiley & Sons, Ltd.     

全球化背景下我国出口退税政策的经济效应

本文通过将出口退税政策变量纳入全球模拟(GSIM)模型,从产业层面和全球视角对出口退税政策通过价格机制影响有关国家的生产、进出口贸易流量、生产者与消费者福利等经济活动进行理论分析。并基于2007年全球纺织品生产与贸易数据,对我国纺织品出口退税政策的主要经济效应进行了模拟分析。结果表明,提高纺织品出口退税率将使我国纺织品的产出、出口以及行业生产者的福利都有所增加,而纺织品内销量有所减少以及消费者的福利受损。     

Women and poverty: Beyond earnings and welfare

Women’s poverty rates are higher than men’s, with single mothers having extremely high poverty rates. This article first briefly examines poverty measures and U.S. poverty rates among men and women. The author then describes and evaluates three categories of economic research on poverty: the lack or inadequacy of employment and earnings; family structure and welfare; and earnings capacities, care-giving responsibilities and employment. Finally the author assesses the policies to alleviate women’s poverty derived from these explanations.     

MARKET MANIPULATION: A SURVEY

Abstract Despite the significant attention that market manipulation has received in recent years many aspects of it are poorly understood. This article identifies from the theoretical and empirical literature what we do and do not know about market manipulation, and suggests directions for future research. We know that manipulation is possible and that it occurs in a wide variety of markets and circumstances. In contrast, we know little about how often manipulation occurs, its effects and how it responds to regulation. Suggested approaches for future research on these issues include: (1) collecting more comprehensive data sets of manipulation cases; (2) using detection controlled estimation methods to overcome sample selection and partial observability problems and (3) conducting controlled experiments. This article also constructs a novel and broad taxonomy of the different types of market manipulation and discusses approaches to defining manipulation.     

Can partial fiscal coordination be welfare worsening?: A model of tax competition

Most work on tax competition argues that mobile factors tend to be undertaxed except if there is coordination of tax policies. Full coordination is not however always feasible, and as a consequence some measures of partial coordination have been proposed such as minimal withholding taxes on interest income. We show that partial coordination can be in some instances welfare worsening and that then no coordination is to be preferred.     

HUMAN CAPITAL MEASUREMENT: A SURVEY

Abstract After a short history of the concept of human capital (henceforth HC) in economic thought ( Section 1 ), this study presents the two main methods for estimating the value of the stock of HC – the retrospective and prospective one – with a review of the models proposed ( Section 2 ). These methods are linked both to the theory of HC investment as a rational choice ( Section 3 ), the literature analysing the contribution of HC investment to economic growth and the HC estimating method through educational attainment ( Section 4 ). The more recent literature on HC as a latent variable is also assessed ( Section 5 ) and a new method of estimation where HC is seen both as an unknown function of formative indicators and as a ‘latent effect’ underlying earned income is proposed ( Section 6 ). Section 7 concludes.     

Copycat gaming: A spatial analysis of state lottery structure

In models of tax competition, tax instruments are explicit; all parties are aware of the tax and respond to incentives provided therein. In the case of state lotteries, the tax is the amount of sales collected but not redistributed as prizes. Using data from 1967 to 2000, we show that although such a tax is implicit, states still engage in tax competition; if neighboring states raise their prize payout by 10% (thereby lowering their lottery tax), the home state will respond with up to a 5% increase in their prize payout.     

THE ECONOMICS OF COUNTERTERRORISM: A SURVEY

We provide a review of theoretical and empirical contributions on the economic analysis of terrorism and counterterrorism. We argue that simple rational‐choice models of terrorist behavior – in the form of cost‐benefit models – already provide a well‐founded theoretical framework for the study of terrorism and counterterrorism. We also hint at their limitations which relate to the failure of accounting for the dynamics between terrorism and counterterrorism that may produce unintended second‐order effects as well as for the costs associated with counterterrorism and its international dimension. We reevaluate previously proposed counterterrorism strategies accordingly. Finally, in the light of our findings, we discuss interesting areas of future research.     

CORPORATE GOVERNANCE AND INNOVATION: A SURVEY

Abstract The traditional economics of innovation, inspired by Schumpeter and more recent advances on his work, seem unable to explain why firms with similar external conditions may show greatly different performance in innovation. Contrastingly, the literature on corporate governance provides some useful insights for understanding corporate innovation activity, to the extent that such literature examines the economic effects of different modes of coordination between firm members. The process through which individuals integrate their human and physical resources within the firm is central to the dynamics of corporate innovation. This paper provides the first survey of the literature on this issue. We start by discussing how various theoretical approaches to the analysis of the firm deal with technological innovation. We then describe three main channels – corporate ownership, corporate finance and labour – through which a system of corporate governance shapes a firm's innovation activity. Finally, we examine the relationship between country‐level institutional settings, national patterns of corporate governance and the aggregate innovation activity of corporations. We conclude by suggesting that future research should focus more deeply on the interrelation between the various dimensions of corporate governance and on their joint effect on firm innovation.     

THE ECONOMIC CAUSES OF OBESITY: A SURVEY

Abstract.  Obesity rates have increased dramatically over the last 30 years. Rising obesity has developed into a considerable worldwide public health problem with significant economic and social consequences. Accordingly, obesity has become a subject of economic research. This paper provides a broad survey of the recent and growing economic literature on the causes of obesity. The literature, both theoretical and empirical, overall aims to explain the rising obesity trend and to identify the factors that contribute to obesity. Also surveyed are non-economic causes and consequences of obesity and the interconnection with economic influences. An understanding of the causes of obesity allows policies to be considered that might stem the global increase in obesity.     

OPTIMAL INSTRUMENTS IN TIME SERIES: A SURVEY

Abstract.  This article surveys estimation in stationary time-series models using the approach of optimal instrumentation. We review tools that allow construction and implementation of optimal instrumental variables estimators in various circumstances – in single- and multiperiod models, in the absence and presence of conditional heteroskedasticity, by considering linear and non-linear instruments. We also discuss issues adjacent to the theme of optimal instruments. The article is directed primarily towards practitioners, but econometric theorists and teachers of graduate econometrics may also find it useful.     

PRICE-LEVEL TARGETING AND STABILISATION POLICY: A SURVEY

Abstract.  This paper surveys recent articles on the costs and benefits of price-level targeting, focusing its use as a tool for stabilisation policy. It discusses how price-level targeting can affect the short-run trade-off between output and inflation variability by influencing inflation expectations. It reviews how assigning an explicit price-level target to a central bank that is unable to commit to its future policies can improve economic performance. It surveys other potential benefits and costs. Among the costs, it underlines the importance of perfectly rational expectations for the optimality of price-level targeting, and an exacerbation of the time inconsistency problem.     

THE CAUSES OF CHILDHOOD OBESITY: A SURVEY

Childhood obesity rates are rapidly rising in many countries. Because it is highly likely that obesity will persist into adulthood, current rates undermine the health and future of people in developed as well as developing countries. This public health epidemic carries significant economic, social as well as individual‐level consequences and has become a research topic of significant interest in various disciplines including economics. We survey the literature in economics and related disciplines associated with the causes of childhood obesity and synthesize the results to provide a better understanding of the explanations for the rising childhood obesity rates. This is an important step in crafting effective policies to combat global childhood obesity trends.     

THE CLIOMETRICS OF INTERNATIONAL MIGRATION: A SURVEY

Abstract This is a survey of some of the key studies in the literature on international migration in history that may be described as cliometric. This literature uses the concepts and approaches of applied economics to investigate a range of historical issues and there are strong parallels with the questions that have been addressed in the literature on contemporary migrations. Here I focus on the period 1850–1940 and chiefly on migration from Europe to the New World. The survey is organized around six themes that include the forces driving migration, over time and across space; the assimilation of migrants and their effects on wages and income distribution in source and destination countries; and the evolution of immigration policy. Although this literature has drawn heavily on the tool kit of applied economists it also provides a wider perspective on many of the issues that concern migration today.     

EXTREME VALUE THEORY IN FINANCE: A SURVEY

Extreme value theory is concerned with the study of the asymptotic distribution of extreme events, that is to say events which are rare in frequency and huge in magnitude with respect to the majority of observations. Statistical methods derived from it have been employed increasingly in finance, especially for risk measurement. This paper surveys some of those main applications, namely for testing different distributional assumptions for the data, for Value‐at‐Risk and Expected Shortfall calculations, for asset allocation under safety‐first type constraints, and for the study of contagion and dependence across markets under conditions of stress.     

THE ECONOMICS OF MOVIES: A LITERATURE SURVEY

Abstract The film industry provides a myriad of interesting problems for economic contemplation. From the initial concept of an idea through production, distribution and finally exhibition there are many aspects to the film project and the film industry that present new and interesting puzzles worthy of investigation. Add to this the high level of data availability, and it is little wonder that an increasing number of researchers are being attracted to this industry. To date, however, there are no comprehensive surveys on the contribution of economists to this literature. This paper attempts to fill this void and unify what is known about the industry. It also identifies and discusses potential areas for new research.     

SOCIAL IDENTITY AND REDISTRIBUTIVE PREFERENCES: A SURVEY

Social identity has become accepted as a key concept underpinning the endogeneity of economic behaviour and preferences. It is important in explaining attitudes towards redistribution and pro‐social behaviour. We examine how economic theory measures social identity and its effects on preferences towards redistribution, social solidarity and redistributive institutions. Empirical evidence indicates that social identity carries weight in explaining the presence of social preferences and attitudes towards redistributive institutions.     

The Effectiveness of Anti‐Smoking Legislation: A Review

Abstract.  This survey focuses on government efforts to curb the use of undesirable goods, notably tobacco products. We synthesize the economics literature and examine the effectiveness of government curbs on tobacco consumption through non‐price controls (such as bans on cigarette advertising, health warnings, and workplace smoking bans) and price measures (or higher prices through higher taxes). This literature review is unique in that we do not merely aim to provide a summary of the literature. Rather, our main focus is to draw conclusions from the literature regarding the effectiveness of alternate policy measures across countries in checking smoking and to provide directions/suggestions for extending the scope of government intervention to other tobacco products.     

SOCIO‐ECONOMIC STUDIES ON SUICIDE: A SURVEY

Abstract In this paper, we review economic theories and empirical studies on the socio‐economic aspects of suicide. Through our survey, we would like to emphasize the importance of studying suicide by employing a ‘rational’ approach that complements the medical perspective on suicide. We first introduce major economic theories of suicide and then present a summary of a variety of empirical studies from the socio‐economic perspective. To shed light on the mixed empirical evidence, we employ a meta‐regression method to investigate how the existing empirical results vary. We have identified a publication bias, not highlighted previously, in the existing literature with respect to several commonly employed socio‐economic factors. Several characteristics of existing studies have been identified as influencing the qualitative outcome. We then discuss the recent developments in economic studies on suicide, on the basis of the authors’ ongoing project on suicide. In the concluding section, we point out some issues for further studies.