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Book part
Publication date: 10 November 2006

Tim Callan, Kieran Coleman and John Walsh

A method of systematically assessing the “first-round” impact of tax and transfer policy changes on the income distribution and the incidence of relative income poverty is…

Abstract

A method of systematically assessing the “first-round” impact of tax and transfer policy changes on the income distribution and the incidence of relative income poverty is proposed. It involves the construction of a “distributionally neutral” policy, which can be approximated by a policy that indexes tax allowances, credits and bands and welfare payment rates in line with a broad measure of income growth. The impact of actual policy changes in five EU countries over the 1998–2001 period is then measured against this benchmark, using the EUROMOD tax-benefit model.

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Micro-Simulation in Action
Type: Book
ISBN: 978-1-84950-442-3

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Book part
Publication date: 1 January 2014

Rolf Aaberge and Ugo Colombino

Abstract

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Handbook of Microsimulation Modelling
Type: Book
ISBN: 978-1-78350-570-8

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Article
Publication date: 12 January 2015

Esfandiar Maasoumi and Tong Xu

The purpose of this paper is to combine multidimensional welfare analysis and entropy metrics to derive not only the best relative weights but also substitution degree…

Abstract

Purpose

The purpose of this paper is to combine multidimensional welfare analysis and entropy metrics to derive not only the best relative weights but also substitution degree among different attributes to construct multidimensional indices of well-being with Chinese Household Income Project Survey 2002 data.

Design/methodology/approach

The authors follow Maasoumi’s two-step measures of multivariate inequality to calculate the inequality for three social groups in China, urban residents, migrants, and rural residents. The two-step approach provides an aggregation formula which is numerically identified in this paper based on a metric entropy distance measure between the distribution of the aggregate well-being functions, on the one hand, and the distribution of the self-reported “happiness” indicator. The authors compare the differences in relative weights and substitution degree for the three groups, and link them to some institutional factors.

Findings

The authors find that incorporating substitution among attributes, and taking into consideration group heterogeneity are very important in multidimensional analysis of well-being.

Originality/value

The two-step approach provides an aggregation formula which is numerically identified in this paper based on a metric entropy distance measure between the distribution of the aggregate well-being functions, on the one hand, and the distribution of the self-reported “happiness” indicator.

Details

Journal of Economic Studies, vol. 42 no. 1
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 2 March 2020

Dionysios Karavidas

This paper aims to shed light on two mechanisms that show how foreign productivity improvement affects domestic welfare.

Abstract

Purpose

This paper aims to shed light on two mechanisms that show how foreign productivity improvement affects domestic welfare.

Design/methodology/approach

First, this study applies a general equilibrium model that takes into account how wages respond to productivity improvements. Second, this study uses a monopolistic competition model that shows how benefits or losses from foreign productivity changes are distributed within domestic economy.

Findings

First of all, this study shows that a region’s productivity improvement is beneficial for the region itself as well as for its trading partner. Moreover, the study finds that productivity improvement in a developing region is beneficial for the entire economy, benefits all unskilled workers in the economy and skilled workers in the developing region and hurts those in the developing region’s trading partner.

Originality/value

This study contributes to the existing literature in two key aspects. First, the study applies a two-region, two-factor, one-sector general equilibrium model with flexible wages, and second, the study uses a two-region, two-factor, two-sector monopolistic competition model, relaxing the single-factor (labor) assumption, which is used in other works. Under the single-factor assumption, foreign productivity changes do not have any impact on domestic income distribution. In reality, however, any productivity change between countries creates losers and winners within each country. Hence, the author believes that it is imperative to study how benefits or losses that come from foreign productivity changes are distributed between domestic production factors.

Details

Journal of Economic Studies, vol. 47 no. 1
Type: Research Article
ISSN: 0144-3585

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Book part
Publication date: 20 May 2003

Jean-Yves Duclos, Vincent Jalbert and Abdelkrim Araar

The last 20 years have seen a significant evolution in the literature on horizontal inequity (HI) and have generated two major and “rival” methodological strands, namely…

Abstract

The last 20 years have seen a significant evolution in the literature on horizontal inequity (HI) and have generated two major and “rival” methodological strands, namely, classical HI and reranking. We propose in this paper a class of ethically flexible tools that integrate these two strands. This is achieved using a measure of inequality that merges the well-known Gini coefficient and Atkinson indices, and that allows a decomposition of the total redistributive effect of taxes and transfers into a vertical equity effect and a loss of redistribution due to either classical HI or reranking. An inequality-change approach and a money-metric cost-of-inequality approach are developed. The latter approach makes aggregate classical HI decomposable across groups. As in recent work, equals are identified through a non-parametric estimation of the joint density of gross and net incomes. An illustration using Canadian data from 1981 to 1994 shows a substantial, and increasing, robust erosion of redistribution attributable both to classical HI and to reranking, but does not reveal which of reranking or classical HI is more important since this requires a judgement that is fundamentally normative in nature.

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Fiscal Policy, Inequality and Welfare
Type: Book
ISBN: 978-1-84950-212-2

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Article
Publication date: 10 November 2014

David John Evans, Erhun Kula and Yoko Nagase

– 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.

Abstract

Purpose

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.

Design/methodology/approach

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.

Findings

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.

Originality/value

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.

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Article
Publication date: 25 June 2020

Zhichao Zhang, Haiyan Xu, Zhi Liu and Yinhai Fang

Members in a supply chain account for corporate social responsibility (CSR) in different ways. This paper considers a socially responsible supply chain in which the…

Abstract

Purpose

Members in a supply chain account for corporate social responsibility (CSR) in different ways. This paper considers a socially responsible supply chain in which the manufacturer innovates in a sustainable product while the retailer exhibits CSR concerns. This paper aims to investigate how socially responsible behavior, namely, sustainable innovations or CSR concerns, affects the pure profit, environmental impact and social welfare, in such a socially responsible supply chain.

Design/methodology/approach

This paper first constructs an integrated case as a benchmark and then develops a Manufacturer-Stackelberg game in a decentralized scenario. The pure profit, environmental impact and social welfare are confirmed and analyzed in centralized and decentralized cases. Moreover, two unique coordinating contracts, i.e. wholesale price discount contract and revenue-sharing contract, are used in this socially responsible supply chain.

Findings

Analytical analysis shows that, under certain conditions, the optimal CSR strategies hold for maximizing pure channel profit, minimizing environmental impact and maximizing social welfare. Whether the performance in a centralized case outnumbers that in a decentralized case depends on the CSR concerns level and environment-friendly degree of the product. In addition, it is found that a wholesale price discount contract is better for the retailer whereas a revenue-sharing contract is better for the manufacturer in pure profit to improve coordinating efficiency.

Practical implications

These results can offer managerial implications to the socially responsible supply chain in terms of pricing decisions, CSR strategies and sustainability innovations. Specifically, under certain conditions, placing more CSR concerns level increases pure channel profit and the social welfare. A balance between the pure profit and the social welfare is hereby achieved for the two socially responsible individuals by designing a proper contract.

Originality/value

To the best of the authors’ knowledge, this paper is among the first studies so far to combine the CSR concerns strategy and sustainability innovation into a socially responsible supply chain.

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Article
Publication date: 28 June 2019

Qiang Hou and Jiayi Sun

The authors consider a dynamic emission-reduction technology investment decision-making problem for an emission-dependent dyadic supply chain consists of a manufacturer…

Abstract

Purpose

The authors consider a dynamic emission-reduction technology investment decision-making problem for an emission-dependent dyadic supply chain consists of a manufacturer and a retailer under subsidy policy for carbon emission reduction. The consumers are assumed to prefer to low-carbon products and formulate a supply chain optimal control problem.

Design/methodology/approach

The authors adopt differential game to analyze investment strategies of cost subsidy coefficient with respect to vertical incentive of a manufacturer and a retailer. A comparison analysis under four different decision-making situations, including decentralized decision-making, centralized decision-making, maximizing social welfare, is obtained.

Findings

The results show that the economic benefit and environmental pressure have a win–win performance in centralized decision-making. In four different game models, equilibrium strategies, profits and social welfare show changing diversity and have a consistent development trend as time goes on.

Research limitations/implications

The authors estimate the demand function is a linear function in this paper. According to the consumers’ preference to low-carbon products, consumer’s awareness meets the law of diminishing marginal utility like advertising goodwill accumulation. The carbon-sensitive coefficient might be a quadratic expression, which will complicate the problem and be consistent with reality.

Practical implications

It captures that there is a necessity to strengthen cooperation and exchange of carbon emission technology among the enterprises by simulation of different decision-makings when government granted cost subsidy.

Social implications

The results provide significant guidelines for the supply chain to make decision-makings of emission-reduction technology investment and relevant government departments to determine emission subsidies costs.

Originality/value

An endogenous subsidies coefficient is produced by the social welfare function. Distinguished from previous study, it also considered the influences of carbon emission trade policy and consumer preference.

Details

Kybernetes, vol. 49 no. 2
Type: Research Article
ISSN: 0368-492X

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Article
Publication date: 5 March 2018

Sungwan Hong, Soo Hyun Oh and Seung-Gyu Sim

Unlike the common belief in the so-called “trickle-down effect,” trade-induced output growth in a small open economy does not necessarily improve the domestic welfare of…

Abstract

Purpose

Unlike the common belief in the so-called “trickle-down effect,” trade-induced output growth in a small open economy does not necessarily improve the domestic welfare of the economy. The purpose of this paper is to analyze the conditions under which the trickle-down effect does not work properly such that the connection between trade-induced output growth and welfare improvement is broken.

Design/methodology/approach

This paper introduces an inter-sectoral migration barrier in the general equilibrium model and conducts various simulation experiments under reasonable parameter values.

Findings

This paper demonstrates that subsidizing export industries may raise the total value-added of an economy but deteriorate aggregate welfare. This worsens especially when the supply of non-tradable domestic goods is inelastic, and the demand for them is more substitutable by tradable goods.

Practical implications

To reinforce the trickle-down effect, it is necessary to facilitate efficient labor reallocation and to induce capitalization in the non-tradable sector.

Originality/value

That output growth and welfare improvement do not always move in the same direction requires a reappraisal of the former common belief on the trickle-down effect which emphasizes output growth as an indicator of welfare improvement.

Details

Journal of Korea Trade, vol. 22 no. 1
Type: Research Article
ISSN: 1229-828X

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Article
Publication date: 7 November 2016

Sushil Mohan, Firdu Gemech, Alan Reeves and John Struthers

This paper aims to estimate the welfare effects for Ethiopian coffee producers from eliminating coffee price volatility.

Abstract

Purpose

This paper aims to estimate the welfare effects for Ethiopian coffee producers from eliminating coffee price volatility.

Design/methodology/approach

To estimate volatility, the generalised autoregressive conditional heteroskedasticity technique is applied to monthly coffee prices in Ethiopia for the period 1976-2012. To distinguish between the unpredictable and predictable components of volatility, we obtain separate estimates of the conditional and unconditional variance of the residual. This is combined with estimates of the coefficient of relative risk aversion to measure the welfare effects from eliminating the unpredictable component of price volatility.

Findings

A key finding is that the welfare gain from eliminating coffee price volatility is small; the gain per producer comes to a meagre US$0.76 in a year.

Originality/value

This has important policy implications for the efficacy of price stabilisation mechanisms for coffee producers, i.e. any attempt to eliminate coffee price volatility at a cost may not be a preferred outcome for Ethiopian producers. The contribution of the paper lies in using the unconditional variance, as it more truly reflects price risk faced by coffee producers without overestimating it.

Details

Qualitative Research in Financial Markets, vol. 8 no. 4
Type: Research Article
ISSN: 1755-4179

Keywords

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