Should public policy respond to positional externalities?

A nice suit is one that compares favorably with those worn by others in the same local environment. More generally, a positional good is one whose utility depends strongly on how it compares with others in the same category.¹A positional externality occurs when new purchases alter the relevant context within which an existing positional good is evaluated.² For example, if some job candidates begin wearing expensive custom-tailored suits, a side effect of their action is that other candidates become less likely to make favorable impressions on interviewers. From any individual job seeker's point of view, the best response might be to match the higher expenditures of others, lest her chances of landing the job fall. But this outcome may be inefficient, since when all spend more, each candidate's probability of success remains unchanged. All may agree that some form of collective restraint on expenditure would be useful.In such cases, however, it is often impractical to negotiate private solutions. Do positional externalities then become legitimate objects of public policy concern? In attempting to answer this question, I employ the classical libertarian criterion put forth by John Stuart Mill³, who wrote the state may not legitimately constrain any citizen's freedom of action except to prevent harm to others. I argue that many positional externalities appear to meet Mill's test, causing not just negative feelings but also large and tangible economic costs to others who are ill-equipped to avoid them. I also discuss an unintrusive policy remedy for positional externalities, one modeled after the use of effluent charges to curb environmental pollution.The paper is organized as follows. Section 1 notes the deep similarity between the conditions that give rise to positional arms races and those that give rise to conventional military arms races. Section 2 follows with a review of evidence concerning the strength of concerns about relative position. Section 3 describes some of the tangible economic costs that people experience as a result of positional externalities arising from such concerns. Section 4 takes up the question of whether collective action directed against positional externalities is consistent with respect for individual rights. Section 5 describes how a progressive consumption tax could neutralize many of the most costly effects of positional externalities.     

There and back again – estimating equivalence scales with measurement error

Using income satisfaction data from the German Socio-Economic Panel, we find large differences in the equivalence weight of a partner when it is being estimated by direct and reverse regressions. We argue that neither of the two models will produce consistent estimates when there is stochastic error in satisfaction and measurement error in incomes. We propose a correction of mismeasured incomes using a constructed alternative income measure. The corrected results are relatively close to those obtained from direct regression. We do not find evidence that previous studies, using the direct regression method, severely suffer from measurement error in incomes.     

房地产属性、收入差距与房价变动趋势

以往关于收入差距与房价之间关系的研究,较少兼顾房地产的消费与投资双重属性。文章基于双重属性的角度,首先从理论上阐述了收入差距与房价之间的动态关系。在经济发展水平较低的情况下,房地产的消费属性凸显,收入差距扩大会抑制房价上涨;随着经济的进一步发展,房地产单一属性不明显,收入差距变化对房价不存在显著影响;当经济发展水平较高时,房地产投资属性占优,收入差距扩大会促进房价上涨。进一步对理论结果进行实证研究发现,整体上我国收入差距与房价之间无显著相关关系,单一属性不明显;但就省际差异而言,在经济发展水平较高的省份,收入差距促进了房价上涨,而在经济发展水平较低的省份,收入差距则抑制了房价上涨。随着时间的变化,收入差距由抑制房价上涨转变为促进房价上涨。     

安徽省城乡居民收入与消费结构对比分析

市场经济的发展使安徽省城乡居民收入不断提高,消费结构得到优化,但城乡差距依然较大。以历年安徽统计年鉴的数据为基础,对安徽省城乡居民收入与消费结构进行分析,为政府扩大内需,优化城乡居民消费结构提供政策建议。     

农民增收的极限约束与跨跃路径

从长期看,农民增收有两个极限性约束条件:一是收入增长速度不能高于或者相当于城市居民收入增长速度;二是农民收入增幅不能高于农村财富的增幅。但是农民收入又不能不维持大幅度的增长,否则会影响国民经济的增长,影响政治社会的稳定。要解决这对矛盾,必须通过农村内部挖潜,拓宽内源性增收空间;调整束缚增收的制度;寻找和扩大外源性增收渠道。     

城镇内部行业收入差距成因的实证研究

运用2012年中国劳动力动态调查微观数据,结合Heckman样本选择方法,估计垄断行业和竞争行业的收入方程,结果发现,垄断对行业收入的影响远大于性别、教育、工作经验等个人特征。运用Shapley值分解方法,考察各因素对我国城镇内部行业工资差距的贡献,结果发现,人力资本因素对行业收入差距的贡献最大。分行业看,人力资本因素能够解释垄断行业收入差距的一半左右,管理岗位对竞争行业收入差距的贡献最大,性别因素对竞争行业收入差距的贡献高出垄断行业两倍,非农户口在解释垄断行业收入差距时的贡献要远大于竞争行业。因此,缩小我国行业收入差距,亟需打破行业垄断壁垒,提高劳动者的受教育水平,减轻劳动者地区间流动障碍。     

The Future Be Damned: Economists’ Optimism and Nuclear Proliferation

Lower income households make much heavier use of costly financial services, such as payday loans, check cashing services, auto title loans, and many more. These services are crafted for, targeted to, and distributed through outlets in lower income neighborhoods. In other words, there are extensive provisioning systems designed specifically to deliver such products and services to these households. Such marketing aimed at lower income groups reduces both their wealth and welfare relative to upper and upper middle groups.