Taxation, Reranking and Equivalence Scales

It is conjectured that if the government has a distributional objective and formulates tax policy with a view to equitable treatment of households, then adopting the scale that is implicit in transfer policy should identify only reranking that has no equity foundation. This motivates the question: can the reranking‐minimizing scales be identified as those implicit in the transfer system? The analysis presented in this study suggests that the equivalence scale which minimizes reranking, while not necessarily equal to the tax implicit equivalence scale, is nevertheless in its vicinity.     

A child health production function estimated from longitudinal data. Cebu Study Team

Collaborating researchers used a multi equation model to analyze 3080 mother-infant pairs living on the island of Cebu in the central Philippines and to estimate a child health production function. The econometric methods used eliminated obstacles such as heterogeneity and endogeneity of significant explanatory factors. They also maximized the longitudinal quality of the data. The results showed that morbidity in 1 period reduced infant weight in following periods. For example, diarrhea and febrile respiratory infection reduced growth in the time period following the illnesses. Further effects of some contributing factors were great near birth not diminished with age. For example, breast feeding promoted growth and protected against infection, especially diarrhea and febrile respiratory infection, more substantially near birth than it did later. Further, in urban areas, preventive health care positively affected growth independently of its indirect influence on reducing respiratory infection. Yet it had little effect on diarrhea. Diarrhea had a strong adverse effect on growth. Exposure of the infant to enteric pathogens had the greatest influence on production of diarrhea. In urban areas, exposure included water supply contamination, exposure to feces, a more pathogenic diet, and community crowding. In rural areas, however, exposure included community crowding and increased rainfall which presumably washed feces into the water supply. Household crowding in both urban and rural areas and irritation from smoke in urban areas only tended to bring about febrile respiratory infection.     

Justifying social discounting: The rank-discounted utilitarian approach

The discounted utilitarian criterion for infinite horizon social choice has been criticized for treating generations unequally. We propose an extended rank-discounted utilitarian (ERDU) criterion instead. The criterion amounts to discounted utilitarianism on non-decreasing streams, but it treats all generations impartially: discounting becomes the mere expression of intergenerational inequality aversion. We show that more inequality averse ERDU societies have higher social discount rates when future generations are better off. We apply the ERDU approach in two benchmark economic growth models and prove that it promotes sustainable policies that maximize discounted utilitarian welfare.     

Risk perception by industrial radiographers: Hungary and the UK compared

Perceptions of risks from two groups of industrial radiographers, one from Hungary, (n = 45) and from the United Kingdom, (n = 29) were compared by the psychometric method. The comparison was made because both groups were at risk for high doses of ionizing radiation. We found the groups had similar demographic profiles but poor socio-economic conditions of Hungarians were associated with higher levels of emotional distress. Correlation HU-UK for personal and general risks were at a significant level for topics that included lifestyle and radiation risks. Perceptions of risks from radiation were small except for large personal risk from East European nuclear power plants. Knowledge of radiation risk intranationally was correlated positively with personal risk for UK radiographers and negatively for Hungarians. However, average overall risk perceptions from the same topic list for all radiographers did not differ significantly from a group (n = 1461) of UK citizens, though radiographer's risks from radiation were considerably greater. As a new lifesaving intervention it was proposed that radiation risk reduction could be achieved by genetic testing.     

The Long‐Run History of Income Inequality in Denmark

We use historical publications and micro data from tax returns to construct internationally comparable estimates of the development in income inequality in Denmark over the last 140 years. The study shows that income inequality and top income shares have declined during several distinct phases in between periods of stability. Furthermore, the quality of the Danish data allows us to analyse not only the development in top income shares but also broader inequality measures such as the Gini coefficient. These analyses show that top income shares are a good proxy for the underlying development in inequality.     

A two price theory of financial equilibrium with risk management implications

Financial primitives are introduced to define acceptable loss exposures when demands and supplies are defined on differing event spaces. Acceptable loss exposures are modeled by a convex cone of random variables containing the nonnegative random variables. The resulting financial equilibrium defines in general a two price economy. Analytical procedures for identifying the two prices are described. The size of the two price economy is fundamentally determined by the financial system that determines the size of the cone of acceptable losses. There are implications for accounting and risk management as liabilities would typically be valued at ask while assets are valued at bid with no data available on bidirectional prices for anything. Marking to market in such financial economies is at best marking to two price economies.