nep-pub New Economics Papers
on Public Finance
Issue of 2023‒10‒16
three papers chosen by
  1. Pricing energy consumption and residential energy-efficiency investment: An optimal tax approach By Claude Crampes; Norbert Ladoux; Jean-Marie Lozachmeur
  2. Corporate Social Responsibility and Voting over Public Goods By Andrew A. Samwick; Sophie Wang
  3. Dining and Wining During the Pandemic? A Quasi-Experiment on Tax Cuts and Consumer Spending in Lithuania By Mr. Serhan Cevik
  1. By: Claude Crampes (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Norbert Ladoux (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Jean-Marie Lozachmeur (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CNRS - Centre National de la Recherche Scientifique)
    Abstract: We analyze a Pareto optimal income tax problem à la Mirrlees (1971) in which households consume three types of goods: energy goods, energy efficient investments and non-energy goods. The two main ingredients of our normative analysis are: i) an indirect relationship between energy and the satisfaction of energy needs, as energy-efficient investments transform energy into services such as light, heating, and air conditioning; and, ii) imperfect information of the policy designer as regards the level of energy efficiency of households' housing and their labor market productivity. Each household differs with respect to these two latter characteristics, and the government designs a non-linear income tax combined with energy and energy efficient investment non linear pricing that maximizes a weighted sum of households' utilities. We show that a benevolent social planner should distort energy prices in a way that depends on the difference between the saturation of energy needs and the complementarity between energy and the level of energy efficiency in the provision of energy services. A sufficient condition for energy consumption to be subsidized is that the rebound effect is small. Second, when individuals can invest in energy efficiency on top of energy consumption, these investments should always be subsidized and the marginal subsidy should always be higher than the one on energy consumption.
    Keywords: Optimal income taxation, Indirect taxation, Energy services, Energy efficiency, Energy consumption
    Date: 2023
    URL: http://d.repec.org/n?u=RePEc:hal:journl:hal-04189094&r=pub
  2. By: Andrew A. Samwick; Sophie Wang
    Abstract: This paper analyzes the impact of corporate social responsibility (CSR) on the total provision of public goods in a framework in which consumers who may make such voluntary contributions to public goods via CSR are also voters who decide on the level of taxes to finance publicly provided public goods. The main result indicates that, relative to an economy in which all public goods are publicly financed, the introduction of CSR lowers the total amount of public goods, as voters rationally anticipate that higher CSR will partially offset the consequences of lower public funding. The results offer a cautionary tale about the promotion of CSR in an economy with heterogeneous preferences for the public good.
    JEL: D72 H41 M14
    Date: 2023–08
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:31633&r=pub
  3. By: Mr. Serhan Cevik
    Abstract: Could temporary tax cuts stimulate consumer spending? Sector-specific measures to the COVID-19 pandemic provides a quasi-experimental variation in consumption patterns to infer a causal effect of tax policy changes. Using a novel dataset of daily debit and credit card transactions, this paper investigates the effectiveness of Lithuania’s decision to cut the standard value-added tax (VAT) rate from 21 percent to 9 percent on restaurants and catering services during the pandemic in a difference-in-differences regression framework. I obtain robust evidence that the VAT reduction has had no statistically significant impact on consumer spending on restaurants and catering services, while other policy interventions such as mobility restrictions and vaccination have more pronounced effects. These results have important policy implications in terms of the expected stimulative effect of sector-specific VAT reductions and the effective design of fiscal policy interventions to counter the impact of pandemics during which mobility is highly constrained.
    Keywords: Tax policy; value-added tax; consumer spending; pandemic; difference-in-differences; Lithuania
    Date: 2023–09–08
    URL: http://d.repec.org/n?u=RePEc:imf:imfwpa:2023/188&r=pub
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