nep-pub New Economics Papers
on Public Finance
Issue of 2012‒10‒06
five papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Fiscal federalism and income redistribution through healthcare financing: An empirical analysis for the Swiss cantons By Luca Crivelli; Paola Salari
  2. The Optimal Carbon Tax and Economic Growth: Additive versus multiplicative damages By Armon Rezai; Frederick van der Ploeg; Cees Withagen
  3. The French tax credit dedicated to sustainable development: an econometric evaluation By A. MAUROUX
  4. Incomplete contracts and optimal ownership of public goods By Schmitz, Patrick W
  5. Are Condorcet procedures so bad according to the reinforcement axiom? By Sébastien Courtin; Boniface Mbih; Issofa Moyouwou

  1. By: Luca Crivelli (Department of Economics, Università della Svizzera Italiana, Switzerland); Paola Salari (Department of Economics, Università della Svizzera Italiana, Switzerland)
    Abstract: Previous studies have viewed Swiss health-care financing as particularly regressive. However, as the OECD Review of the Swiss Health System (2011) stated, the income-related inequities and the inter cantonal variations are still unexplored due to a lack of available information. The present paper aims to fill this information gap concerning the Swiss health system by exploring the differences in the level of regressivity of health-care system financing across cantons and over time using household data. The empirical evidence confirms that the Swiss health-care system financing has remained quite regressive since the major reform of 1996 and that the variations in equity across cantons are quite significant. The results are an interesting contribution towards re-thinking a new possible reform of the Swiss health-care system, as well as for other federal states (such as the U.S.) that use regulation and subsidies to ensure universal coverage.
    Keywords: Equity, health care system financing, fiscal federalism
    JEL: D63 H24 H51
    Date: 2012–09
  2. By: Armon Rezai; Frederick van der Ploeg; Cees Withagen
    Abstract: In a calibrated integrated assessment model we investigate the differentia impact of additive and multiplicative damages from climate change for both a socially optimal and a business-as-usual scenario in the market economy within the context of a Ramsey model of economic growth. The sources ofenergy are fossil fuel which is available at a cost which rises as reserves diminish and a carbon-free backstop supplied at a decreasing cost. if damages are not proportional to aggregate production output, and the economy is along a development path, the social cost of carbon and the optimal carbon tax are smaller as damages can more easily be compensated for by higher output. As a result, the economy switches later from fossil fuel to the carbon-free backstop and leaves less fossil fuel in situ. This is in contrast to a partial equilibrium analysis with dmages in utility rather than in production which finds that the willingness to forsake current consumption to avoid future global warming is higher (lower) under additive damages in a growing economy if the elasticity of intertemporal substitution is smaller (bigger) than one.
    Keywords: climate change, multiplicative damages, additive damages, integrated assessment models, Ramsey growth model, fossil fuel, carbon-free backstop
    JEL: H21 Q51 Q54
    Date: 2012
  3. By: A. MAUROUX (Insee)
    Abstract: A tax credit dedicated to sustainable development was first introduced in France in 2005 in order to encourage households to invest in energy conservation and to install renewable energy equipments. It was a big success: between 2005 and 2008 about one primary residence in sixteen was renovated asking for this green tax credit (Clerc, Marcus, Mauroux 2010). In this article we take advantage of an exogenous increase of the tax credit rate to assess its incentive impact. In 2006 the tax credit rate on energy conservation expenditures was raised from 25% to 40% but only for the subset of homeowners living for less than 3 years in a building completed before 1977. We estimate on exhaustive fiscal data the impact of this marginal increase of the tax credit rate on the declaration rate of eligible households using a matching method combined with triple differences, based on Heckman, Ichimura, Smith and Todd (1998). If the tax credit rate had not been raised, in 2006 one eligible household in fifteen among the declarants living for less than three years in a dwelling completed between 1969 and 1976 would not have used this tax credit, one in eight in 2007 and in 2008. Between 2006 and 2008, the additional public cost due to the tax credit increase is at least 80 million euros for the sub-sample of homeowners living for less than 3 years in a dwelling completed between 1969 and 1976, i.e. an average cost between 6,550 and 10,360 euros per additional retrofitted dwelling. Except if the average CO2 emission reductions per household are greater than 10 tonnes each year over the equipment life span, the public cost of a tonne of CO2 avoided by additional declarant among the eligible living in a building completed between 1969 and 1973 would be higher than 32 ¬, the tutelary value of carbon in 2008.
    Keywords: tax credit, sustainable development, public policy evaluation, matching, difference-in-differences estimates
    JEL: H31 H23 D12
    Date: 2012
  4. By: Schmitz, Patrick W
    Abstract: The government and a non-governmental organization (NGO) can invest in the provision of a public good. In an incomplete contracting framework, Besley and Ghatak (2001) have argued that the party who values the public good most should be the owner. We show that this conclusion relies on their assumption that the parties split the renegotiation surplus 50:50. If the generalized Nash bargaining solution is applied, then for any pair of valuations that the two parties may have, there exist bargaining powers such that either ownership by the government or by the NGO can be optimal.
    Keywords: incomplete contracts; investment incentives; ownership; public goods
    JEL: D23 D86 H41 L31
    Date: 2012–09
  5. By: Sébastien Courtin; Boniface Mbih; Issofa Moyouwou (THEMA, Universite de Cergy-Pontoise; University of Caen basse-Normandie; University of Yaounde I)
    Abstract: A Condorcet social choice procedure elects the candidate that beats every other candidate under simple majority when such a candidate exists. The reinforcement axiom roughly states that given two groups of individuals, if these two groups select the same alternative, then this alternative must also be selected by their union. Condorcet social choice procedures are known to violate this axiom. Our goal in this paper is to put this important voting theory result into perspective. We then proceed by evaluating how frequently this phenomenon is susceptible to occur.
    Keywords: Condorcet procedures • Reinforcement axiom • Likelihood • Impartial culture • Impartial anonymous culture
    JEL: D71
    Date: 2012

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