nep-pbe New Economics Papers
on Public Economics
Issue of 2005‒06‒19
eight papers chosen by
Kerim Arin
Massey University

  1. The Political Economy of Portuguese Intergovernmental Grants By Linda Gonçalves Veiga; Maria Manuel Pinho
  2. Welfare Reform, Saving, and Vehicle Ownership: Do Asset Limits and Vehicle Exemptions Matter? By James X. Sullivan
  3. Non Cooperative Games: design of fictitious republic money for exchange control, banking and taxation By Krishna Gopal Misra
  4. ¿Pueden competir los pequeños productores mexicanos en el mundo actual? By Gustavo Gordillo; Paul Lewin
  5. Les fondements économiques de la gratuité des biens et services informationnels. Financement indirect et investissement en gratuité By Françoise Vasselin
  6. Discrete choice models of labour supply, behavioural microsimulation and the Spanish tax reform. By José M. Labeaga; Xisco Oliver; Amedeo Spadaro
  7. Rational Addiction, Tax Revenues and Tobacco Control By Junmin Wan
  8. Welfare Analysis of Debt Policy during Recessions By Takayuki Ogawa

  1. By: Linda Gonçalves Veiga (Universidade do Minho - NIPE); Maria Manuel Pinho (Universidade do Porto)
    Abstract: We use a large and unexplored dataset covering all mainland Portuguese municipalities from 1979 to 2002 to evaluate the impact of political forces in the allocation of grants from the central government to local authorities. Empirical results clearly show that, besides variables that proxi local population needs and the macroeconomic situation of the country, political variables condition the granting system: (1) grants increase in municipal and legislative election years, (2) the larger the number of years a mayor has been in office, the larger the amount of funds transferred to his/her municipality. These effects are particularly strong for grants that are not formula-determined.
    Keywords: political economy, intergovernmental relations, grants, Portugal.
    JEL: H77 H59 D72
    Date: 2005
  2. By: James X. Sullivan (University of Notre Dame)
    Abstract: This paper examines whether AFDC/TANF asset tests affect the asset holdings of low-educated single mothers, exploiting variation in asset limits and exemptions across states and over time. There are important reasons to examine vehicle assets in this context. For example, vehicles make up a very significant share of total wealth for poor families, and the variation in vehicle exemptions over time and across states far exceeds the variation in asset limits. Consistent with other recent research, I find little evidence that asset limits have an effect on the amount of liquid assets that single mothers hold. However, I find evidence that vehicle exemptions do have an important effect on vehicle assets. The findings suggest that moving from a $1500 vehicle exemption to a full vehicle exemption increases the probability of owning a car by 20 percentage points for low-educated single mothers relative to a comparison group. Also, the results indicate that single mothers are not substituting vehicle equity for liquid assets in response to more relaxed restrictions on vehicles.
    Keywords: Sullivan, TANF, eligibility, vehicle, asset limits
    Date: 2005–06
  3. By: Krishna Gopal Misra (QUALITYMETER.COM)
    Abstract: 'Reality of money' is curiously similar to uncertainty theory of (Heisenberg) quantum physics. To some (natural societies), legitimacy of exchange control is derived by associating it with certain physical significance of 'real' goods. Exchange control is thus decided by producers in commodity exchanges. Others (Republicans of Greek civilization) think, money can be only a symbolic or fictitious unit, and any physical significance attached to it will undermine sanctity (in respect to space and time) of money used as unit for measurement of the prices. Under these circumstances, exchange control is monopoly of republics and debt engine produces competition and enterprises in people. There are two worlds. Performance of markets (Republics vs. Natural Societies) is going to test which of the perspective and understanding are true and for how long. A republic is design of a game of Master and Slaves in creating forces of competition with fictitious (unreal or without physical significance) coupons. This is a human nature that people are excited so much about unreal things and they can always produce any amount of real / natural things or sacrifices to pay for unreal or unknowable. Gaming/ gambling unfortunately uses of this human weakness in making slaves compete among themselves. This article describes design of Republican (Greek civilization) monetary system as a NON CO-OPERATIVE GAMES and how the psychograph of ignorant souls is exploited by the state, and how the mess of economics is successfully able to create a form of criminal peace and prosperity. This article discusses the valuation of prices, unit price or measuring unit for prices, legitimacy of exchange control in markets, invention of commodity exchanges using 'real' money, invention of 'fictitious' money, banking, state monopoly of exchange control and mathematical legitimacy of interests and taxation.
    Keywords: liberatarians, free markets, ligitimacy of exchange control, natural thinking on economics, human psychology in economics
    JEL: A
    Date: 2005–06–12
  4. By: Gustavo Gordillo; Paul Lewin
    Keywords: desarrollo rural, comercio, competitividad, agricultura familiar, pequeños productores, ejido, TLC
    JEL: D6 D7 H
    Date: 2005–06–14
  5. By: Françoise Vasselin (MATISSE)
    Abstract: Usually, an economic good isn't available gratuitously, but the case of information goods and services (IGS) is specific. Their intrinsic properties allow zero prices that is unconceivable for the others economic private goods. The gratuitousness is not the aim of productive activity ; it results from private choices we can group into two innovative generic models. On the one hand, the indirect financing of gratuitousness for information services is based on natural factors of gratuitousness inherent in information. On the other hand, the offer strategy of information goods uses potential factors of gratuitousness linked to their production and their distribution. These models are founded on the information valorisation, the getting round of intellectual property rights, opportunity cost and sacrifice of margins that constitute the economic foundations of gratuitousness of IGS.
    Keywords: Information goods and services, free, economies of scale, externalities, rivalry, exclusion, appropriation, strategy, financing, investment
    JEL: D62 H41 M2
    Date: 2005–03
  6. By: José M. Labeaga; Xisco Oliver; Amedeo Spadaro
    Abstract: In this paper, we demonstrate the potential of behavioural microsimulation models as powerful tools for the ex ante evaluation of public policies. The subject of our analysis is the impact of recent Spanish Income Tax reforms on efficiency and household and social welfare. We also analyze the likely effects of some basic income - flat tax and vital minimum - flat tax schemes. The analysis is carried out using a microsimulation model in which labour supply is explicitly taken into account. Instead of following the traditional continuous approach (Hausman 1981, 1985a, and 1985b), we estimate the direct utility function using the methodology proposed by Van Soest (1995). Our data come from a sample of Spanish individuals in the 1995 wave of the EC Household Panel. We show that in the Spanish case, the redistribution policies considered have only little impact on the efficiency of the economy. On the contrary, they strongly affect social welfare.
    Date: 2005
  7. By: Junmin Wan (Institute of Social and Economic Research, Osaka University)
    Abstract: The hypotheses of non-addiction, myopia and rational addiction are tested using annual, quarterly and monthly data. Changes in the prices of Japanese cigarettes can be viewed as natural experiments from the point of view of consumer behavior, because the Japanese government controls cigarette prices. The empirical results of this paper support the addiction hypothesis. The short-run and long-run price elasticities range from - 0.338to -0.421, and from -0.679 to -0.686, respectively; thus, increases in tax revenues in the long-run are likely to be smaller than those in the short-run. As a result, tax increases would be an effective means of curbing smoking and reducing its social cost. Furthermore, the debt compensation programs for the Japan Railway and the National Forestry will not go according to plan, unless revenues are increased in the future.
    Keywords: smoking, rational addiction, tax revenues
    JEL: D12 E21 H29
    Date: 2002–08
  8. By: Takayuki Ogawa (Institute of Social and Economic Research, Osaka University)
    Abstract: This paper develops an overlapping-generations model with nominal wage rigidities and examines the welfare effects of debt policy during recessions. Issues of public debt stimulate aggregate consumption demand and create employment. Future generations then face both increased wage incomes and higher taxes. If the amount of outstanding bonds is already large, debt policy deteriorates the welfare of future generations by levying heavy taxes. By contrast, if the outstanding bond issue is relatively small, debt policy can be Pareto improving by creating more employment. Therefore, the welfare implications of debt policy during recessions can be discriminated from those during booms.
    Keywords: debt policy, overlapping generations, welfare effects.
    JEL: E12 E24 H63
    Date: 2004–07

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