nep-pbe New Economics Papers
on Public Economics
Issue of 2005‒04‒16
twenty-two papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior

  1. The Pigouvian Tax Rule in the Presence of an Eco-Industry By Alain-Désiré Nimubona; Bernard Sinclair-Desgagné
  2. Comment on 'The Value of Tax Shields is NOT Equal to the Present Value of Tax Shields', Including an Arbitrage Opportunity By Nicholas X. Wonder; Paul Fieten; Lutz Kruschwitz
  3. Coordination Failure in Repeated Games with Almost-Public Monitoring By George J. Mailath; Stephen Morris
  4. Asymmetric Wholesale Pricing: Theory and Evidence By Sourav Ray; Haipeng (Allan) Chen; Mark Bergen; Daniel Levy
  5. Capital Gains Taxes, Irreversible Investment, and Capital Structure. By Norman Schürhoff
  6. The more we know, the less we agree: public announcements and higher-order expectations By Peter Kondor
  7. Can a carbon permit system reduce Spanish unemployment? By Fæhn, Taran; Gómez-Plana, Antonio G.; Kverndokk, Snorre
  8. A Whiter Shade of Pale: on the Political Economy of Regulatory Instruments By Baldursson, Fridrik M; von der Fehr, Nils-Henrik M
  9. Labor supply when tax evasion is an option By Jørgensen, Øystein; Ognedal, Tone; Strøm, Steinar
  10. Income inequality and the economic position of women in Norway 1970 - 2002 By Bojer, Hilde
  11. Externalities, Border Trade and Illegal Production: An Optimal Tax Approach to Alcohol Policy By Aronsson, Thomas; Sjögren, Tomas
  12. Une analyse théorique de l’interaction entre l’emploi public et les performances du marché du travail dans les pays en développement By Yves Abessolo
  13. Is Public R&D a Complement or Substitute for Private R&D? A Review of the Econometric Evidence By Paul A. David; Bronwyn H. Hall; Andrew A. Toole
  14. The Individual Behavior in a Public Goods game By Walid HICHRI
  15. Selfish-biased conditional cooperation: On the decline of contributions in repeated public goods experiments By Tibor Neugebauer; Javier Perote; Ulrich Schmidt; Malte Loos
  16. Behaviour in a Two-Stage Two Public Goods Experiment By Massimo Finocchiaro Castro
  17. Adjustment of the WACC with Subsidized Debt in the Presence of Corporate Taxes: the N-Period Case By Ignacio Velez-Pareja; Joseph Tham; Viviana Fernandez
  18. Reforming the Taxation of Human Capital: A Modest Proposal for Promoting Economic Growth By Paul A. David
  20. Optimal Taxation with Commitment in a Two-sector Neoclassical Economy By Sheikh Selim
  21. Measuring China's Fiscal Policy Stance By Sebastian Dullien
  22. The macroeconomics of obesity in the United States By Peralta-Alva Adrian; Pere Gomis- Porqueras

  1. By: Alain-Désiré Nimubona; Bernard Sinclair-Desgagné
    Abstract: Pollution abatement goods and services are now largely being delivered by a specialized "eco-industry." This note reconsiders Pigouvian taxes in this context. We find that the optimal emission tax will depart from the marginal social cost of pollution according to the polluters' and the environment firms' relative market power. <P>La production des biens et services destinés à reduire la pollution incombe actuellement souvent à des firmes spécialisées qui forment ce que l'on appelle maintenant l'« éco-industrie ». Cette note reconsidère les taxes pigouviennes dans ce contexte. Il est démontré que la taxe optimale sur les émissions polluantes divergera du coût social marginal de la pollution selon les pouvoirs de marché relatifs des pollueurs et des entreprises environnementales.
    Keywords: Pigouvian taxes, environment industry, taxes pigouviennes, industries de l'environnement
    JEL: H23 L13
    Date: 2005–04–01
  2. By: Nicholas X. Wonder; Paul Fieten; Lutz Kruschwitz
    Abstract: In a forthcoming paper, Fernandez (2002) claims to derive a formula for the valuation of debt tax shields for firms with cash flows that grow perpetually at a constant rate. We show that his formula is incorrect and provide an example where his valuation would admit arbitrage. In a forthcoming paper, Fernandez (2002) claims to derive a formula for the valuation of debt tax shields for firms with cash flows that grow perpetually at a constant rate. We show that his formula is incorrect and provide an example where his valuation would admit arbitrage.In a forthcoming paper, Fernandez (2002) claims to derive a formula for the valuation of debt tax shields for firms with cash flows that grow perpetually at a constant rate. We show that his formula is incorrect and provide an example where his valuation would admit arbitrage. In a forthcoming paper, Fernandez (2002) claims to derive a formula for the valuation of debt tax shields for firms with cash flows that grow perpetually at a constant rate. We show that his formula is incorrect and provide an example where his valuation would admit arbitrage.In a forthcoming paper, Fernandez (2002) claims to derive a formula for the valuation of debt tax shields for firms with cash flows that grow perpetually at a constant rate. We show that his formula is incorrect and provide an example where his valuation would admit arbitrage. In a forthcoming paper, Fernandez (2002) claims to derive a formula for the valuation of debt tax shields for firms with cash flows that grow perpetually at a constant rate. We show that his formula is incorrect and provide an example where his valuation would admit arbitrage.In a forthcoming paper, Fernandez (2002) claims to derive a formula for the valuation of debt tax shields for firms with cash flows that grow perpetually at a constant rate. We show that his formula is incorrect and provide an example where his valuation would admit arbitrage. In a forthcoming paper, Fernandez (2002) claims to derive a formula for the valuation of debt tax shields for firms with cash flows that grow perpetually at a constant rate. We show that his formula is incorrect and provide an example where his valuation would admit arbitrage.
    Keywords: Present value of tax shield, perpetuities
    JEL: G31 G32 H43
    Date: 2003–12–31
  3. By: George J. Mailath (Dept. Economics, University of Pennsylvania); Stephen Morris (Cowles Foundation, Yale University)
    Abstract: Some private-monitoring games, that is, games with no public histories, can have histories that are almost public. These games are the natural result of perturbing public-monitoring games towards private monitoring. We explore the extent to which it is possible to coordinate continuation play in such games. It is always possible to coordinate continuation play by requiring behavior to have bounded recall (i.e., there is a bound L such that in any period, the last L signals are sufficient to determine behavior). We show that, in games with general almost-public private monitoring, this is essentially the only behavior that can coordinate continuation play.
    Keywords: Repeated games, Private monitoring, Almost-public monitoring, Coordination, Bounded recall
    JEL: C72 C73 D82
    Date: 2004–09
  4. By: Sourav Ray; Haipeng (Allan) Chen; Mark Bergen; Daniel Levy
    Abstract: Asymmetric pricing is the phenomenon where prices rise more readily than they fall. We articulate, and provide empirical support for, a theory of asymmetric pricing in wholesale prices. In particular, we show how wholesale prices may be asymmetric in the small but symmetric in the large, when retailers face costs of price adjustments. Such retailers will not adjust prices for small changes in their costs. Upstream manufacturers then see a region of inelastic demand where small wholesale price changes do not translate into commensurate retail price changes. The implication is asymmetric – small wholesale increases are more profitable because manufacturers will not lose customers from higher retail prices; yet, small wholesale decreases are less profitable, because these will not create lower retail prices, hence no extra revenue from greater sales. For larger changes, this asymmetry at wholesale vanishes as the costs of changing prices are compensated by increases in retailers’ revenue that result from correspondingly large retail price changes. We first present a formal economic model of a channel with forward looking retailers facing costs of price adjustment to derive the testable propositions. Next, we test these on manufacturer prices in a supermarket scanner dataset to find support for our theory. We discuss the contributions of the results for the asymmetric pricing, distribution channels and cost of price adjustment literatures, and implications for public policy.
    Date: 2005–03
  5. By: Norman Schürhoff (HEC, University of Lausanne, FAME.)
    Abstract: This paper studies the corporate policy distortions caused by realization-based capital gains taxation at the personal level in a dynamic trade-off theory model. The Lock-in effect of embedded capital gains creates severe conflicts of interest between incumbent and new investors. The firm's optimal policy exhibits path-dependency and non-stationarity, since the taxe basis of the firm's owners is a valuable conditioning variable for corporate decisions. Ex-ante identical firms follow very different investment and financial policies depending on their stock price evolution. Firms delay irreversible investment further the lower tax basis of their owners falls. The reason is the investment hedge provided by personal tax loss offsets weakens as investors reset their basis. Capital gains taxation also creates incentives to time equitzy issues. Firms employ more equity in their capital structure the higher the stock price-to-basis ratio, since locked-in investors with out-of-the-money tax timing options value the firm less than the market. The value gain from conditioning on the owner's tax basis is substantial. Using simulated data I show the combined effects are consistent with recent empirical evidence on the relation between leverage, Tobin's Q, and past performance.
    Keywords: Capital Gains Taxation, Real Options, Capital Structure, Trade-off Theory, Market Timing.
    JEL: G3 G32 H24 H32
  6. By: Peter Kondor
    Abstract: The stylized fact that public announcements in financial markets are followed by intense trading, high trading volume and volatile prices, is widely perceived as the sign of increasing disagreement due to the announcement. However, it is common to argue that this would be inconsistent with Bayesian-learning and common priors. In this paper, we not only show that — with certain information structures — increasing disagreement is possible in a Bayesian model, but we also argue that with the assumption that traders trade for resale — so they try to second guess future traders’ guesses — there are information structures which are simple, intuitive and plausible and result in increasing disagreement even in a standard, multi-period Grossman—Stiglitz model.
    Date: 2005–04
  7. By: Fæhn, Taran (Research Department, Statistics Norway,); Gómez-Plana, Antonio G. (Dept. of Economics, University of Oslo); Kverndokk, Snorre (Ragnar Frisch Centre for Economic Research)
    Abstract: This paper analyses whether recycling revenues from carbon emission permit auctions can reduce unemployment in the Spanish economy. Spain's deviation from EU's intermediate emission goals is more serious than for most other EU countries, and the unemployment is also well above the EU average. We use a CGE model that includes a matching model with two types of labour, and which allows for different pricing rules and returns-to-scale assumptions. We find that abatement reduces unemployment due to beneficial impacts of recycling the revenue from permit sales. Unemployment is more effectively abated when revenues are used to reduce labour taxes rather than indirect taxes. Contrary to other studies of Europe, we find that the best option is to reduce payroll taxes on skilled labour. This reform is the most successful both in increasing demand and in dampening the supply response to rising wages. All the recycling schemes also generate dividends in terms of welfare, but none offset the abatement costs entirely.
    Keywords: Spanish unemployment; Tax reform; Emission Permit Auctions; Employment dividend; Matching functions; Increasing returns to scale; Computable general equilibrium models
    JEL: D58 J68 Q38
    Date: 2005–12–15
  8. By: Baldursson, Fridrik M (University of Iceland); von der Fehr, Nils-Henrik M (Dept. of Economics, University of Oslo)
    Abstract: We consider an intertemporal policy game between changing governments that differ in their attitudes towards a particular feature of market outcomes, exemplified with environmental pollution. When in power, a government will choose policy instruments and set strictness of regulation with a view to influencing the policy of future, possibly different, governments. We demonstrate that a ‘brown’ government favours emission quotas over effluent taxes, as quotas establish property rights that are costly to reverse. Conversely, a ‘green’ government prefers to regulate by taxes, in order to limit the incentives of future ‘brown’ governments to ease regulations. Strategic behaviour tends to exaggerate policy differences (making ‘green’ governments ‘greener’ and ‘brown’ governments ‘browner’) compared to when such strategic considerations were not an issue.
    Keywords: regulation; political economy; effluent taxes; tradable quotas; property rights; commitment; environmental management
    JEL: D81 H23 L51 Q28 Q38
    Date: 2004–12–04
  9. By: Jørgensen, Øystein (Dept. of Economics, University of Oslo); Ognedal, Tone (Dept. of Economics, University of Oslo); Strøm, Steinar (Dept. of Economics, University of Oslo)
    Abstract: We estimate labor supply when tax evasion is an option, using a discrete choice model on pooled Norwegian survey data from 1980 and 2001. Direct labor supply elasticities, conditional on sectors, are in the range of 0.2-0.4. The elasticities are higher for work that is not registered for taxation, than for registered work. Overall wage increases have a positive impact on the supply of registered work and a negative impact on supply of unregistered work. In addition to economic factors such as wages and tax rates, also social norms and opportunities for tax evasion at the work place have an impact on the supply of unregistered labor. The model is used to simulate the impact on labor supply of changes in the tax structure, such as the lowering of marginal tax rates. The fraction of the population who did unreported work was reduced from 1980 to 2001. Lower and less progressive tax rates after 1980 have contributed to this reduction. Although taxes matter for supply of both reported and non-reported labor, the impact is not strong. Social norms and opportunities for tax evasion at the work place are also important in explaining the change.
    Keywords: Labor supply; tax evasion; survey data; microeconometrics
    JEL: C25 D12 D81 H26 J22
    Date: 2005–04–06
  10. By: Bojer, Hilde (Dept. of Economics, University of Oslo)
    Abstract: In the period from 1970 to 2002, Norwegian women moved out of the home and into the paid labour market. The paper investigates the e®ect of this social change on women's economic position and on individual income in-equality. It argues that the distribution of individual incomes is of equal interest to household incomes as targets of public policy. Inequality is measured by the generalised entropy measure. The data are taken from the triennial, later annual, surveys of income carried out by Statistics Norway in the period, giving reliable data on income for samples varying from 6000 to 30 000 women and men. Women's average income relative to that of men increased from 27 percent to 60 per cent. Total individual income inequality decreased strongly from 1970 to 1990, and decreased very slightly from 1990 to 2002. But this total covers very di®erent developments for women and men. Women's internal inequality decreased up to about 1990; the later trend is unclear. Men's internal inequality increased during the 1990s. However, the increase in men's inequality is shown to be mostly due to °uctuations in capital income. Inequality of employees remained unchanged during the whole period, both for women and men, when capital income is disregarded.
    Keywords: Income distribution; Women
    JEL: D31
    Date: 2005–04–05
  11. By: Aronsson, Thomas (Department of Economics, Umeå University); Sjögren, Tomas (Department of Economics, Umeå University)
    Abstract: This paper deals with optimal income and commodity taxation in an economy, where alcohol is an externality-generating consumption good. In our model, alcohol can be bought domestically, imported (via border trade) or produced illegally. Border trade implies an incentive to set the domestic alcohol tax below the marginal social damage of alcohol, and to tax (subsidize) commodities which are complementary with (substitutable for) alcohol. In addition, since leisure and alcohol consumption are generally nonseparable, the income tax will also be used as a corrective instrument. On the other hand, the desire to reduce the illegal production may generally affect the optimal income and commodity taxes in either direction. One possible (and arguably realistic) outcome is, nevertheless, that the desire to avoid the illegal production works to reduce both the alcohol tax and the marginal income tax rate.
    Keywords: taxation; external effects; alcohol; border trade.
    JEL: D61 D62 H21 H23
    Date: 2005–04–04
  12. By: Yves Abessolo (CEREG, Université de Yaoundé II)
    Abstract: Cet article analyse les interactions entre l’emploi public et les performances du marché du travail dans les pays en développement. Si dans les pays développés il est montré que l’emploi public évince l’emploi privé et accroît le chômage, notre contribution théorique suggère que l’emploi public a une influence importante sur les performances du marché du travail des pays étudiés à travers trois canaux. D’abord, à travers des externalités positives, l’emploi public accroît la productivité du secteur privé. Ensuite, compte tenu du degré de substitution entre les productions des secteurs public et privé d’une part, et du niveau des rentes d’autre part, l’emploi public n’évince pas l’emploi privé. Enfin, aucun élément théorique ne justifie l’idée selon laquelle l’emploi public accroît le chômage, nos résultats suggèrent même que l’emploi public diminue durablement le chômage. This paper explores the consequences of public employment on labour market performances in developing countries. If in developed countries evidence shows that public employment may not only crowd out private employment, but also increase overall unemployment, our theoretical considerations suggest that public employment significantly affects labour market performances through three channels. First, positive externalities of public employment increase private sector productivity. Secondly, with the level of substitutability of public and private outputs, and the size of the rents, there is no crowding out effects of public jobs on the private sector. In the latter case, our theoretical analysis suggests that public employment may reduce unemployment in developing countries. (Full text in french)
    JEL: J21 J23 J24 J33
    Date: 2004–11
  13. By: Paul A. David (All Souls College, Oxford University & Stanford University); Bronwyn H. Hall (Nuffield College, Oxford University, & University of California at Berkeley); Andrew A. Toole (Stanford Institute for Economic Policy Research, Stanford University)
    Abstract: Is public R&D spending complementary and thus “additional” to private R&D spending, or does it substitute for and tend to “crowd out” private R&D? Conflicting answers are given to this question. We survey the body of available econometric evidence accumulated over the past 35 years. A framework for analysis of the problem is developed to help organize and summarize the findings of econometric studies based on time series and cross-section data from various levels of aggregation (laboratory, firm, industry, country). The findings overall are ambivalent and the existing literature as a whole is subject to the criticism that the nature of the “experiment(s)” that the investigators envisage is not adequately specified. We conclude by offering suggestions for improving future empirical research on this issue
    JEL: O P
    Date: 2005–02–10
  14. By: Walid HICHRI (GREQAM & University of Aix-Marseille III)
    Abstract: Generally, with a standard linear public goods game, one observes at the aggregate level that contributions lay between the Nash equilibrium and the social optimum and decrease over time with an end-effect.Our purpose is to see whether these general aggregate results remain available at the group and at the individual levels. To do so, we formed six groups of four persons and made them play a public goods game. At the aggregate level, we find that our results correspond almost to the standard experimental findings in literature.Using the classification of Isaac et al. (1984), we find that at the group level, only two groups adopt the standard behavior and only two groups present a behavior similar to what we obtain at the aggregate level. At the individual level, we compare contributions over time of each subject to the group and the aggregate results and classify them into types. Only in one of the 6 groups individuals adopt an homogeneous behavior. In the five other groups, individuals have different behaviors.
    Keywords: Public Goods; Free-Riding; Aggregate level; Individual Behavior; Experiments.
    JEL: H4
    Date: 2005–02–21
  15. By: Tibor Neugebauer (University Hannover); Javier Perote (Juan Carlos University Madrid); Ulrich Schmidt (University Hannover); Malte Loos (University Kiel)
    Abstract: The recent literature suggests that people have social preferences with a self-serving bias. Our data analysis reveals that the stylized fact of declining cooperation in repeated public goods experiments results from this bias and adaptation.
    Keywords: experimental economics, information feedback, public goods, voluntary contributions, conditional cooperation
    JEL: C72 C92 H41
    Date: 2005–03–25
  16. By: Massimo Finocchiaro Castro (Department of Economics, Royal Holloway College, University of London & DEMQ, University of Catania)
    Abstract: In a two-stage two-public good experiment, we study the effect that subjects’ possibility of contributing to a public good in the first stage of the game has on the voluntary contributions to the second public good. Our results show that subjects do not follow either the Nash strategy or the Pareto efficient strategy and that they perceive the two public goods as substitutes.
    Keywords: public goods, experiments, voluntary provision
    JEL: A13 H41 C92
    Date: 2005–04–05
  17. By: Ignacio Velez-Pareja (Politecnico Garncolombiano); Joseph Tham (Duke University); Viviana Fernandez (Universidad de Chile)
    Abstract: In the Weighted Average Cost of Capital (WACC) applied to the free cash flow (FCF), we assume that the cost of debt is the market, unsubsidized rate. With debt at the market rate and perfect capital markets, debt only creates value in the presence of taxes through the tax shield. In some cases, the firm may be able to obtain a loan at a rate that is below the market rate. With subsidized debt and taxes, there would be a benefit to debt financing, and the unleveraged and leveraged values of the cash flows would be unequal. The benefit of lower tax savings are offset by the benefit of the subsidy. These two benefits have to be introduced explicitly. In this paper we present the adjustments to the WACC with subsidized debt and taxes and the cost of leveraged equity for multiple periods. We demonstrate the analysis for both the WACC applied to the FCF and the WACC applied to the capital cash flow (CCF). We use the calculation of the Adjusted Present Value, APV, to consider both, the tax savings and the subsidy. We show how all the methods match.
    Keywords: Adjusted Present Value, APV, weighted average cost of capital, discounted cash flow, DCF equity value, cost of equity, WACC, subsidized debt with taxes, valuation of cash flows, project evaluation, project appraisal, firm valuation, cost of capital, cash flows, free cash flow, capital cash flow
    JEL: D61 G30 G31 G32 H43
    Date: 2005–04–06
  18. By: Paul A. David (Stanford University & University of Oxford)
    Abstract: A new scheme of personal income tax reform would eliminate the inefficiencies arising from differences in the tax treatment of investments in intangible human capital and other types of capital formation. It also would offset the exacerbation of those distortions caused by progressive taxation, without requiring abandonment of the latter principle. The proposed incremental reform of the personal income tax regime would permit full deductibility of private costs of education and training, but defer the exercise of the deduction credits. The novel instrument for achieving these objectives is an individually held, non- transferable asset: an untaxed, interest-bearing educational (expense) deduction account -- christened the “UIBEDA,” and pronounced: “we- bedda.” Under plausibly realistic assumptions about the time profile of education-associated earnings differentials, and the progressiveness of tax rate schedules, it is feasible for the Treasury adopting such a scheme to satisfy an intertemporal balanced budget constraint, while in effect acting as a financial intermediary in the market for human capital investments. The UIBEDA scheme facilitates shifting from direct educational subsidies to the use of publicly subsidized student loans, and also can be readily extended to promote selective immigration of workers who have incurred indebtedness for human capital investments abroad.
    JEL: I
    Date: 2005–02–10
  19. By: Edgar L. Feige (University of Wisconsin-Madison)
    Abstract: The “underground economy” literature has generated a plethora of vague terms (shadow, hidden, subterranean) that have served to confuse rather than clarify the substantive issues raised by the finding that significant segments of economic activity may be imperfectly accounted for in the conventional data bases that form the foundation of empirical inquiry in economics. This paper outlines a taxonomic framework that clarifies the distinction between “unrecorded” and “unreported” economic activities and examines the appropriate empirical counterparts of these concepts. All too often, the under-recording of income in National Income and Product Accounts has been confused with the underreporting of income on tax forms. The concept of a “full compliance deficit” is introduced in order to distinguish between structural, cyclical and compliance components of budget deficit measures. Reference: The Unofficial Economy, Alessandrini and Dallago (eds.) Gower, 1987. pp. 83- 106.
    Keywords: underground, unreported, unrecorded, non-observed, shadow,deficits, full compliance deficit,IRS,tax gap.
    JEL: H26 H62
    Date: 2005–02–03
  20. By: Sheikh Selim (University of Southampton)
    Abstract: This paper examines dynamic optimal income taxation problem in a two- sector neoclassical model where the government is able to commit to a sequence of tax plans for future. It finds that (1) while it is optimal to set a zero long run capital tax for the capital goods sector, steady state optimal capital tax can be nonzero in the consumption goods sector; (2) if the government faces an ex ante constraint of setting equal factor income taxes, the optimal levels of both capital tax rates are nonzero. The distortion created by the nonzero capital tax in consumption goods sector, given the other capital tax is set at zero, is in no way explosive in nature, since economic agents can avoid the compounding tax liabilities simply by shifting depreciated capital.
    Keywords: Optimal Taxation, Primal Approach, Two-sector Model, Ramsey Problem.
    JEL: H
    Date: 2005–02–21
  21. By: Sebastian Dullien (Financial Times Deutschland)
    Abstract: This paper argues that the tradtitional way of gauging a country's fiscal policy stance by looking at government budget deficit or cyclically adjusted budget deficits is misleading in the case of China, since a lot of what usually would be considered fiscal policy is conducted via investment by state owned enterprises. The paper therefore proposes a different indicator for the fiscal policy stance, constructed from government consumption, government expenditure, the state-owned- enterprises' investments and tax revenue. Using this indicator, it can be shown that fiscal policy has been strongly counter-cyclical in China over the past two decades.
    Keywords: Fiscal Policy, China, State-Owned Enterprises, Statistics
    JEL: E62
    Date: 2005–02–28
  22. By: Peralta-Alva Adrian (University of MIami); Pere Gomis- Porqueras (University of Miami)
    Abstract: The weight of the average American adult has increased by 12 pounds and obesity rates have doubled since the early 1960s. Recent studies show these changes in weight can be attributed to the dramatic rise in the consumption of prepared food and food away from home. We investigate the role of taxes and the gender wage gap in accounting for the trends in the composition of the food consumed by the average American adult. According to our general equilibrium analysis, the observed movements in the personal income tax rate and in the gender wage gap can account for more than one half of the increased caloric intake, consumption of prepared food, food away from home, and capital specific for cooking activities of Americans. Furthermore, our theory is also qualitatively consistent with the patterns of time use on market and food preparation activities of the data.
    Keywords: Obesity, Price per calorie, Gender wage gap, Taxes, Technological change, general equilibrium, price of food, relative price of food
    JEL: E
    Date: 2005–03–17

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