On Calculating Welfare Losses of Taxation and Public Provision on the margin and to a degree
AbstractIn the paper an index number measuring inefficiency of taxation is introduced which is based on an economy-wide generalisation of the input distance function. Related concepts are an input based quantity index, the index of real endowment, and a productivity index indicating effectiveness of the public sector and the society's welfare index which offer a convenient summary way of analyzing the extent and nature of government intervention from the perspective of welfare and standard-of-living in the society. These indices should have wide applicability since they are based on a reinterpretation of similar concepts used in production theory. Hedonic scales seem particularly promising in offering a practical way of measuring the extent of intervention through the change in the marginal rates of substitution of the private goods.
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Bibliographic InfoPaper provided by Government Institute for Economic Research Finland (VATT) in its series Discussion Papers with number 108.
Date of creation: 01 Jan 1995
Date of revision:
Find related papers by JEL classification:
- D60 - Microeconomics - - Welfare Economics - - - General
- C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
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