How sensitive is the provision of public inputs to specifications?
AbstractThis paper studies the sensitivity of provision of public inputs to changes in the specification of technology and consumer preferences. We consider a simple model in which the government, with recourse to three different tax settings (a lump-sum tax, a tax on labour and a tax on economic profit), provides firms with certain productive services. We focus on the numerical results coming from the government optimization problem. We look at several specific cases in which the returns to scale in the production function emerges as a critical issue. Our …findings also address the impact of changes in output elasticity, in consumer preferences and in the number of households on the levels of public input and utility.
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Bibliographic InfoPaper provided by Universidad Pablo de Olavide, Department of Economics in its series Working Papers with number 10.04.
Length: 23 pages
Date of creation: Mar 2010
Date of revision:
firm-augmenting public input; factor-augmenting public input; optimal provision;
Find related papers by JEL classification:
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-04-11 (All new papers)
- NEP-CMP-2010-04-11 (Computational Economics)
- NEP-PBE-2010-04-11 (Public Economics)
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- A. Sanchez & Diego Martinez, 2011.
"Optimization in Non-Standard Problems. An Application to the Provision of Public Inputs,"
Society for Computational Economics, vol. 37(1), pages 13-38, January.
- A. Jesus Sanchez Fuentes & Diego Martinez Lopez, 2008. "Optimization in non-standard problems. An application to the provision of public inputs," Working Papers 08.07, Universidad Pablo de Olavide, Department of Economics.
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