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Non-Welfarist Optimal Taxation And Behavioral Public Economics

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  • Kanbur, Ravi
  • Pirttila, Jukka
  • Tuomala, Matti

Abstract

Research in behavioral economics has uncovered the widespread phenomenon of people making decisions against their own good intentions. In these situations, the government might want to intervene, indeed individuals might want the government to intervene, to induce behavior that is closer to what individuals wish they were doing. The analysis of such corrective interventions, through taxes and subsidies, might be called ”behavioral public economics.” However, such analysis, where the government has an objective function that is different from that of individuals, is not new in public economics. In these cases the government is said to be ”non-welfarist” in its objectives, and there is a long tradition of non-welfarist welfare economics, especially the analysis of optimal taxation and subsidy policy where the outcomes of individual behavior are evaluated using a preference function different from the one that generated the outcomes. The object of this paper is to first of all present a unified view of the non-welfarist optimal taxation literature and, secondly, to present behavioral public economics as a natural special case of this general framework.

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Bibliographic Info

Paper provided by Cornell University, Department of Applied Economics and Management in its series Working Papers with number 127150.

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Date of creation: Sep 2004
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Handle: RePEc:ags:cudawp:127150

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Keywords: Institutional and Behavioral Economics;

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References

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  6. Pirttila, Jukka & Tuomala, Matti, 2004. "Poverty alleviation and tax policy," European Economic Review, Elsevier, vol. 48(5), pages 1075-1090, October.
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  8. RACIONERO, Maria del Mar, . "Optimal redistribution with unobservable preferences for an observable merit good," CORE Discussion Papers RP -1473, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  9. Besley, Timothy, 1988. "A simple model for merit good arguments," Journal of Public Economics, Elsevier, vol. 35(3), pages 371-383, April.
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  12. Diamond, Peter & Koszegi, Botond, 2003. "Quasi-hyperbolic discounting and retirement," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 1839-1872, September.
  13. Kanbur, R. & Keen, M. & Tuomala, M., 1990. "Optimal Non-Linear Income Taxation for the Alleviation of Income Poverty," The Warwick Economics Research Paper Series (TWERPS) 368, University of Warwick, Department of Economics.
  14. Sandmo, Agnar, 1983. "Ex Post Welfare Economics and the Theory of Merit Goods," Economica, London School of Economics and Political Science, vol. 50(197), pages 19-33, February.
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  17. Sheshinski, Eytan, 2003. "Optimal Policy to Influence Individual Choice Probabilities," MPRA Paper 55163, University Library of Munich, Germany.
  18. Bruce Bradbury, 2004. "Targeting social assistance," Fiscal Studies, Institute for Fiscal Studies, vol. 25(3), pages 305-324, September.
  19. Kanbur, Ravi & Pirttila, Jukka & Tuomala, Matti, 2004. "Moral Hazard, Income Taxation, And Prospect Theory," Working Papers 127136, Cornell University, Department of Applied Economics and Management.
  20. Oswald, Andrew J., 1983. "Altruism, jealousy and the theory of optimal non-linear taxation," Journal of Public Economics, Elsevier, vol. 20(1), pages 77-87, February.
  21. Eytan Sheshinski, 2003. "Bounded Rationality and Socially Optimal Limits on Choice in a Self-Selection Model," CESifo Working Paper Series 868, CESifo Group Munich.
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  24. Schokkaert, Erik & Van de gaer, Dirk & Vandenbroucke, Frank & Luttens, Roland Iwan, 2004. "Responsibility sensitive egalitarianism and optimal linear income taxation," Mathematical Social Sciences, Elsevier, vol. 48(2), pages 151-182, September.
  25. Kanbur, R. & Keen, M., 1988. "Poverty, Incentives And Linear Income Taxation," The Warwick Economics Research Paper Series (TWERPS) 298, University of Warwick, Department of Economics.
  26. Besley, Timothy J & Kanbur, S M Ravi, 1988. "Food Subsidies and Poverty Alleviation," Economic Journal, Royal Economic Society, vol. 98(392), pages 701-19, September.
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  1. Non-Welfarist Optimal Taxation And Behavioral Public Economics
    by Alessandro Cerboni in Knowledge Team on 2013-12-31 23:39:20
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