Search results

The purpose of this paper is to estimate survey-based values of the elasticity of marginal social valuation of income, an important welfare parameter in cost-benefit analysis.

A model relating equity welfare weights to income is developed, and iso-elasticity of marginal valuation of income is tested using survey data obtained from a sample of Turkish politicians who are instrumental in policy making.

Based on the survey feedback, formal statistical testing indicates that Turkish politicians, regardless of party allegiance, reveal preferences consistent with an iso-elastic marginal social valuation of income. The estimated value of the elasticity measure is close to unity for each of the political parties.

The originality of the paper is in terms of the survey method used to obtain from Turkish politicians estimates of the marginal social valuation of income. This welfare parameter is needed in the calculation of both social discount rates and welfare weights. The paper will be of interest to academics in the field of welfare economics as well as to practitioners involved in the appraisal of social projects and policies.

Allyn Young′s lectures, as recorded by the young Nicholas Kaldor, survey the historical roots of the subject from Aristotle through to the modern neo‐classical writers. The focus throughout is on the conditions making for economic progress, with stress on the institutional developments that extend and are extended by the size of the market. Organisational changes that promote the division of labour and specialisation within and between firms and industries, and which promote competition and mobility, are seen as the vital factors in growth. In the absence of new markets, inventions as such play only a minor role. The economic system is an inter‐related whole, or a living “organon”. It is from this perspective that micro‐economic relations are analysed, and this helps expose certain fallacies of composition associated with the marginal productivity theory of production and distribution. Factors are paid not because they are productive but because they are scarce. Likewise he shows why Marshallian supply and demand schedules, based on the “one thing at a time” approach, cannot adequately describe the dynamic growth properties of the system. Supply and demand cannot be simply integrated to arrive at a picture of the whole economy. These notes are complemented by eleven articles in the Encyclopaedia Britannica which were published shortly after Young′s sudden death in 1929.

The British government takes equity issues formally into account in its appraisal of social projects and policies. However, evidence on which the measured distributional welfare weights are based is neither broad enough nor sufficiently reliable. This paper seeks to address these issues by considering a wider body of evidence.

An important component of the welfare weight measure advocated by HM Treasury is the elasticity of marginal utility of consumption (e). A critical review of existing evidence on e is provided with a view to establishing priority areas for further research. New measures of e are presented based on revealed social values as indicated in specific government policies relating to both foreign aid and proposed income‐related fines for offences. Behavioural evidence based on demand analysis using a co‐integration approach is also presented.

The results for e are sensitive to the estimation approach adopted. While the evidence based on a revealed social values approach including modified tax‐based results suggests that e is close to unity, the measure currently used by HM Treasury, demand analysis suggests an e value close to 1.5. The evidence based on lifetime consumption behaviour is sensitive to model specification and needs updating.

Modified tax‐based findings on e are presented along with new evidence based on alternative revealed social values approaches. The new evidence from demand analysis is based on an Autoregressive Distributed Lag (ARDL) approach to co‐integration. This paper will be of interest to academics specialising in welfare economics and to practitioners involved in social project appraisal.

The purpose of this paper is to recognise and provide an approach to estimate the value of an institution that produces a public good to the wealth of a nation. Specifically, the authors value utilitarian justice.

The paper employs the classical economic theories of crime and shadow pricing to estimate the total economic value and shadow prices or social productivity of police and higher court deterrence. These measures are estimated using the definitions provided by Dasgupta and by re-engineering key deterrence elasticity estimates gleaned from Australian econometric studies.

The empirical findings suggest a relatively high social value for police and higher court deterrence. Notwithstanding, addressing socio-economic disadvantage is likely to prevent more subsequent offences than directing more resources to the operation of the criminal justice system.

The key limitations involve the sensitivity of the estimates to error. Further work is required on all the estimates in the model and in particular the social costs of the serious offences. The next step is to estimate the opportunity cost of supplying police and court deterrence. The cost estimate can then be combined with the estimates of social benefits to estimate a benefit-cost ratio. The model in broad terms demonstrates a way forward to estimating the economic value of and the social productivity of the criminal justice system. The provision of retributive justice is also ignored in this contribution. This requires a separate analysis.

The social implications are that there appears a way to both justify and evaluate the criminal justice system and this methodology may be applied to the operation of other public services.

The originality of this paper lies in suggesting a method to solve the valuation problem for the jointly produced public goods of the higher courts and police.

A tax based on land value is in many ways ideal, but many economists dismiss it by assuming it could not raise enough revenue. Standard sources of data omit much of the potential tax base, and undervalue what they do measure. The purpose of this paper is to present more comprehensive and accurate measures of land rents and values, and several modes of raising revenues from them besides the conventional property tax.

The paper identifies 16 elements of land's taxable capacity that received authorities either trivialize or omit. These 16 elements come in four groups.

In Group A, Elements 1‐4 correct for the downward bias in standard sources. In Group B, Elements 5‐10 broaden the concepts of land and rent beyond the conventional narrow perception, while Elements 11‐12 estimate rents to be gained by abating other kinds of taxes. In Group C, Elements 13‐14 explain how using the land tax, since it has no excess burden, uncaps feasible tax rates. In Group D, Elements 15‐16 define some moot possibilities that may warrant further exploration.

This paper shows how previous estimates of rent and land values have been narrowly limited to a fraction of the whole, thus giving a false impression that the tax capacity is low. The paper adds 14 elements to the traditional narrow “single tax” base, plus two moot elements advanced for future consideration. Any one of these 16 elements indicates a much higher land tax base than economists commonly recognize today. Taken together they are overwhelming, and cast an entirely new light on this subject.

This paper aims to understand housing demand of urban Indian households in terms of housing and household-level characteristics. Because a house is a bundle of certain characteristics which vary across houses, each characteristic has an implicit price. Finding this implicit price for certain important characteristics is the first objective of this study. The second objective of the paper is to compute the income elasticity and price elasticity of housing demand for these cities.

To achieve comparable estimates, household-level data from India’s National Sample Survey Organisation housing surveys for the years 2002 and 2008-2009 have been used. A hedonic price function is estimated using ordinary least squares (OLS) and Box-Cox functional forms to estimate the implicit prices of housing characteristics. This exercise is attempted for owned and rented houses separately. Demand function required for computing the elasticities, uses the hedonic price index derived from the implicit prices and household characteristics.

The study finds housing demand to be income elastic and price inelastic for the six cities across both the time periods.

Firstly, this study includes housing characteristics such as individual access to drinking water, modern sanitation facility, separate kitchen, condition of the structure, existence of a road with street light and whether the house is in a slum or non-slum area in the hedonic price function. These variables were not used in any of the earlier studies pertaining to India. Secondly, it uses the Box-Cox non-linear form to derive the hedonic price function, a specification not used earlier. Thirdly, this is the first study analysing housing demand across the six largest Indian cities.

The purpose of this article is to examine the proposition that the benefits from environmental improvements accrue disproportionately to the rich.

The character of environmental welfare economics is addressed and the idea of “nature‐sparing” technology is examined; if the conservation of nature is to work then this kind of technology should replace nature‐affecting technologies. A theory to effect this is formulated and an environmental policy is proposed.

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.

The fundamental problem of designing a wide scope general revenue tax can be reduced to the selection of the base used for administering the tax. Our current personal income tax is a hybrid version of a tax assessed on the basis of a tax unit's annual income receipts. An alternative to an income‐based tax that has received much theoretical treatment but little actual application is an expenditure‐based tax. An expenditure tax (also called a consumption tax or cash flow tax in the context of this paper) differs from an income tax in that it exempts net saving and investment from the tax base. Though the details of a consumption tax design are discussed more fully elsewhere in this paper, the tax base of an expenditure tax is roughly determined by subtracting net savings from gross receipts (including wages, tips, salaries, income from investments, interests, etc.). Withdrawals from savings constitute dissavings and are appropriately included in net savings. The cash flow tax, with wealth transfers deductible to the donor and included in the tax base of the recipient, would be a tax on an individual's standard of living. Similar to the present income tax standard deduction, some universal credit or exemption for a small level of consumption could be allowed.