Stephen Williamson on Marginal Taxation
03 Aug 2014 Leave a comment
in applied welfare economics, fiscal policy, income redistribution, politics - New Zealand, politics - USA, Public Choice Tags: envy, Stephen Williamson, taxation and entrepreneurship, taxation and human capital, taxation and investment, taxation and labour supply, top 1%
He says a lot. I’ll try to address piece by piece.
Next, some people have shown interest in this paper by Diamond and Saez. A key result that seemed to get these people excited is the calculation of a top optimal marginal tax rate (including all taxes) of 73%, relative to the current rate of 42.5%. There are two key assumptions that Diamond and Saez make to come up with the 73% optimal rate. First, we should not care about the welfare (at the margin) of the rich people. This argument is based solely on the notion that marginal utility of income is low for the top income-earners. Second, Diamond and Saez use a “behavioral elasticity” of tax revenue with respect to the tax rate of 0.25. To see how this matters, if you use their formula and an elasticity of one, you get an optimal top tax rate…
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Managerial Econ: Physician Induced Demand
31 Jul 2014 Leave a comment
in applied welfare economics, health economics Tags: agent principal problems, asymmetric information, moral hazard, Physician Induced Demand
Rehavi and Johnson compare obstetricians’ choice of C-section during childbirth when the expectant mother is herself a medical doctor to when she is not. From their abstract:
… Consistent with PID [Physician Induced Demand], physicians are almost 10 per cent less likely to receive a C-section, with only a quarter of this effect attributable to differential sorting of patients to hospitals or obstetricians.
Market Failure, Considered as an Argument both for and Against Government| David Friedman
24 Jul 2014 Leave a comment
in applied price theory, applied welfare economics, comparative institutional analysis, constitutional political economy, David Friedman, liberalism, libertarianism Tags: David Friedman, externality, government failure, market failure
Then a miracle occurs: the applied welfare economics of blackboard economics
20 Jul 2014 Leave a comment
![[P1-AJ574_PAYMEN_20071112193244.gif]](https://utopiayouarestandinginit.com/wp-content/uploads/2014/07/d632c-p1-aj574_paymen_20071112193244.gif?w=535)
Managerial Econ: What happened when Tennessee kicked 170,000 out of medicaid?
11 Jul 2014 Leave a comment
in applied welfare economics, labour economics Tags: medicaid, welfare traps
There was an immediate increase in job search behaviour and a steady rise in employment and health insurance coverage following the disenrollment. These results suggest a significant degree of employment lock: workers employed primarily in order to secure private health insurance coverage
via Managerial Econ: What happened when Tennessee kicked 170,000 out of medicaid?.
Utopia, you are standing in it! 
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