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Groupings and the Gains From Tagging

Listed author(s):
  • Kanbur, Ravi
  • Tuomala, Matti

The central assumption of the large literature on “tagging” is that the groupings available to the government are given and fixed. But how many and which types of groups should the government choose to tag? This is the question addressed in this paper. Starting with a simple framework and ending with numerical simulations based on data from Finland, we show how groupings should be formed for tagging, and provide a quantitative assessment of how group differences affect the gains from tagging, and of the marginal welfare gains from increasing the number of groups being tagged.

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File URL: http://purl.umn.edu/180142
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Paper provided by Cornell University, Department of Applied Economics and Management in its series Working Papers with number 180142.

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Date of creation: 2014
Handle: RePEc:ags:cudawp:180142
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  17. Besley, Timothy, 1990. "Means Testing versus Universal Provision in Poverty Alleviation Programmes," Economica, London School of Economics and Political Science, vol. 57(225), pages 119-129, February.
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  24. Marja Riihelä & Risto Sullström & Matti Tuomala, 2008. "Economic Poverty in Finland 1971–2004," Finnish Economic Papers, Finnish Economic Association, vol. 21(1), pages 57-77, Spring.
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  28. Kanbur, Ravi & Tuomala, Matti, 1994. " Inherent Inequality and the Optimal Graduation of Marginal Tax Rates," Scandinavian Journal of Economics, Wiley Blackwell, vol. 96(2), pages 275-282.
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