This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

The Welfare Analysis of Fiscal Policy: A Simple Unified Account

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
James E. Anderson () (Boston College)
Will Martin (World Bank)

Additional information is available for the following registered author(s):

Abstract

A simple general equilibrium model of an economy with distortionary taxes and public goods is used to extend, unify and clean up the welfare analysis of changes in taxation, redistribution and the provision of public goods. We clarify the distinction between compensation and money metric measures of the welfare impact of fiscal changes and show that the equivalent variation measure dominates other measures. We provide an integrated approach to marginal tax and public good changes when public goods have real resource costs and must be financed by distortionary taxation using the concepts of the marginal cost of funds, the fiscal price of public goods and the virtual price of public goods. Here too, the compensation version of these concepts dominates the money metric version.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://fmwww.bc.edu/EC-P/WP316.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by Boston College Department of Economics in its series Boston College Working Papers in Economics with number 316..

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 33 pages
Date of creation: 01 Jan 1996
Date of revision:
Handle: RePEc:boc:bocoec:316

Contact details of provider:
Postal: Boston College, 140 Commonwealth Avenue, Chestnut Hill MA 02467 USA
Phone: 617-552-3670
Fax: +1-617-552-2308
Email:
Web page: http://fmwww.bc.edu/EC/
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Christopher F Baum).

Related research
Keywords: Marginal cost of funds; fiscal price; virtual price; duality;

Other versions of this item:

Find related papers by JEL classification:
H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
H40 - Public Economics - - Publicly Provided Goods - - - General

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Anderson, James E & Neary, J Peter, 1992. "Trade Reform with Quotas, Partial Rent Retention, and Tariffs," Econometrica, Econometric Society, vol. 60(1), pages 57-76, January. [Downloadable!] (restricted)
  2. Mayshar, Joram, 1990. "On measures of excess burden and their application," Journal of Public Economics, Elsevier, vol. 43(3), pages 263-289, December. [Downloadable!] (restricted)
  3. Fullerton, Don, 1991. "Reconciling Recent Estimates of the Marginal Welfare Cost of Taxation," American Economic Review, American Economic Association, vol. 81(1), pages 302-08, March. [Downloadable!] (restricted)
  4. Squire, Lyn, 1989. "Project evaluation in theory and practice," Handbook of Development Economics, in: Hollis Chenery† & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 2, chapter 21, pages 1093-1137 Elsevier. [Downloadable!] (restricted)
  5. Alan J. Auerbach, 1986. "The Theory of Excess Burden and Optimal Taxation," NBER Working Papers 1025, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  6. Ballard, Charles L & Fullerton, Don, 1992. "Distortionary Taxes and the Provision of Public Goods," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 117-31, Summer. [Downloadable!] (restricted)
    Other versions:
  7. Schob, Ronnie, 1994. "On Marginal Cost and Marginal Benefit of Public Funds," Public Finance = Finances publiques, , vol. 49(1), pages 87-106.
  8. Hatta, Tatsuo, 1977. "A Theory of Piecemeal Policy Recommendations," Review of Economic Studies, Blackwell Publishing, vol. 44(1), pages 1-21, February. [Downloadable!] (restricted)
  9. Neary, J. P. & Roberts, K. W. S., 1980. "The theory of household behaviour under rationing," European Economic Review, Elsevier, vol. 13(1), pages 25-42, January. [Downloadable!] (restricted)
    Other versions:
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Fukase, Emiko & Martin, Will, 1999. "The effect of the United States'granting Most Favored Nation status to Vietnam," Policy Research Working Paper Series 2219, The World Bank. [Downloadable!]
  2. Emiko Fukase & Will Martin, 2000. "The effects of the United States granting MFN status to Vietnam," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 136(3), pages 539-559, 09. [Downloadable!] (restricted)
  3. Anderson, James E. & Martin, Will, 1998. "Evaluating public expenditures when governments must rely on distortionary taxation," Policy Research Working Paper Series 1981, The World Bank. [Downloadable!]
  4. Salvatici, Luca & Cipollina, Maria, 2006. "Measuring Protection: Mission Impossible?," Working Papers 18876, TRADEAG - Agricultural Trade Agreements. [Downloadable!]
    Other versions:
  5. John C. Beghin & Jean-Christophe Bureau & Sung Joon Park, 2001. "Food Security and Agricultural Protection in South Korea," Center for Agricultural and Rural Development (CARD) Publications 01-wp284, Center for Agricultural and Rural Development (CARD) at Iowa State University. [Downloadable!]
    Other versions:
  6. Martin, Will & Anderson, James E., 2005. "Costs of taxation and the benefits of public goods : the role of income effects," Policy Research Working Paper Series 3700, The World Bank. [Downloadable!]
    Other versions:
  7. James E. Anderson, 1997. "Trade Reform with a Government Budget Constraint," Boston College Working Papers in Economics 348., Boston College Department of Economics. [Downloadable!]
    Other versions:
  8. Can Erbil, 2004. "Trade Taxes Are Expensive," International Trade 0409002, EconWPA. [Downloadable!]
  9. Beghin, John C. & Bureau, Jean-Christophe & Park, Sung Joon, 2002. "The Cost of Food Self-Sufficiency and Agricultural Protection in South Korea," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24879, European Association of Agricultural Economists. [Downloadable!]
  10. Joseph Pelzman & Amir Shoham, 2006. "De-linking the Relationship between Trade Liberalization and Reduced Domestic Fiscal Budgets: The Experience of the Israeli Economy: 1984-2005," Global Economy Journal, Berkeley Electronic Press, vol. 6(3). [Downloadable!]
  11. Luca Salvatici, 2001. "Trade Distortion Indexes And Multiregional Age Models: The Case Of The Common Agricultural Policy," Working Papers 45, Sapienza University of Rome, Department of Public Economics. [Downloadable!]
Statistics
Access and download statistics

Did you know? RePEc data is maintained by each archive holder on its own website. Nothing is held centrally.

This page was last updated on 2009-12-6.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.