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Deadweight Loss (deadweight + loss)
Selected AbstractsPRICE AND EFFICIENCY EFFECTS OF TAXES AND SUBSIDIES FOR AUSTRALIAN HOUSINGECONOMIC PAPERS: A JOURNAL OF APPLIED ECONOMICS AND POLICY, Issue 2 2007PETER ABELSON This paper quantifies the major subsidies and taxes that affect housing, the impacts on house prices and housing consumption, and the efficiency effects. Private housing receives an estimated net subsidy of $6.3 billion per annum. Most of this subsidy accrues to homeowners, who as a group receive about an 8% subsidy on imputed gross rentals. The rental sector receives a subsidy of approximately 0.4% of rents. On plausible (unitary elasticity) demand and supply assumptions, the homeowner subsidy increases all housing prices by about 2% and total housing consumption by about 2%, with the rise in consumption by home owners more than offsetting the fall in consumption by renters. The housing subsidy produces an estimated deadweight loss from expenditure on renovations of about $100 million per annum. However, contrary to previous work, the paper finds that the housing subsidy produces welfare gains from expenditure on new housing in the order of $187 million a year. This arises because the subsidy offsets the over-regulated supply of new housing. Transaction taxes on housing have a separate deadweight loss of $375 million per annum. Also, the unequal treatment of homeowners and renters creates a small annual deadweight loss. [source] Forecasting the Adoption of GM Oilseed Rape: Evidence from a Discrete Choice Experiment in GermanyJOURNAL OF AGRICULTURAL ECONOMICS, Issue 2 2008Gunnar Breustedt C42; C81; Q12; Q16 Abstract This paper explores farmers' willingness to adopt genetically modified (GM) oilseed rape prior to its commercial release and estimates the ,demand' for the new technology. The analysis is based upon choice experiments with 202 German arable farmers. A multinomial probit estimation reveals that GM attributes such as gross margin, expected liability from cross pollination, or flexibility in returning to conventional oilseed rape significantly affect the likelihood of adoption. Neighbouring farmers' attitudes towards GM cropping and a number of farmer and farm characteristics were also found to be significant determinants of prospective adoption. Demand simulations suggest that adoption rates are very sensitive to the profit difference between GM and non-GM rape varieties. A monopolistic seed price would substantially reduce demand for the new technology. A monopolistic seed supplier would reap between 45% and 80% of the GM rent, and the deadweight loss of the monopoly would range between 15% and 30% of that rent. The remaining rent for farmers may be too small to outweigh possible producer price discounts resulting from the costs of segregating GM and non-GM oilseed rape along the supply chain. [source] Gerechtigkeit und Marktwirtschaft , das Problem der ArbeitslosigkeitPERSPEKTIVEN DER WIRTSCHAFTSPOLITIK, Issue 4 2008Malte Faber Conventionally, it is argued that involuntary unemployment causes a deadweight loss in social welfare, because it involves the under-use of a productive resource. We explore this efficiency argument with a public choice approach, employing the notion of homo oeconomicus. We contrast this with a perspective using the concept of homo politicus, which stresses social justice. We apply our findings to the special case of German social reform, especially Hartz IV, and show that some of its policy recommendations are in accordance with our analysis. [source] The Cost of Monopoly in Australian ManufacturingTHE AUSTRALIAN ECONOMIC REVIEW, Issue 4 2001Robert Dixon This article looks at the deadweight loss arising from monopoly elements in Australian manufacturing under various assumptions and its relationship with the level of concentration. [source] How Effective is Farmer Early Retirement Policy?EUROCHOICES, Issue 3 2008Quelle est l'efficacité de la politique de préretraite pour les agriculteurs? Summary How Effective is Farmer Early Retirement Policy? Financial support for EU farmers seeking early retirement is a discretionary element of CAP rural development policy and some EU member states, most notably France, Ireland and Greece have chosen to implement the measure. We explore whether the introduction of such schemes is likely to represent good value for money. We use data from Northern Ireland, a region with a relatively small-scale family-farm structure, where there have been periodic calls from farmer groups to introduce support for early retirement. We estimate the benefits that might arise from the introduction of such a scheme using FADN data and a separate survey of 350 farmers aged 50 to 65. We find that farm scale is a significant determinant of profit per hectare but that operator age is not. Benefits from releasing land through an early retirement scheme are conditional on such transfers bringing about significant farm expansion and changes in land use. Even when these conditions are satisfied, however, pensions payments of only about one-third the statutory maximum could be justified in a best-case scenario. Almost a quarter of all payments would incur deadweight losses, i.e., go to farmers who would be retiring anyway. Overall, the economic case for such a scheme is considered to be weak. Le soutien financier aux agriculteurs de l'Union européenne qui veulent prendre une retraite anticipée est un élément discrétionnaire de la politique de développement rural de la PAC et certains pays membres, en tout premier lieu la France, l'Irlande et la Grèce, ont choisi de mettre en place cette mesure. Nous recherchons si l'introduction de telles mesures serait intéressante par rapport au coût financier. L'analyse porte sur des données nord-irlandaises, région d'exploitations familiales de taille relativement petite dans laquelle les représentants agricoles ont régulièrement appeléà la mise en place de soutien pour la retraite anticipée. Nous estimons les avantages que pourrait procurer l'introduction de cette mesure à l'aide de données du RICA et d'une enquête indépendante portant sur 350 agriculteurs âgés de 50 à 65 ans. Nous trouvons que la taille de l'exploitation est un déterminant significatif du profit par hectare mais que l'âge de l'exploitant n'en est pas un. Les avantages de la mise à disposition de terres grâce à un programme de préretraite dépendent de la capacité de ces transferts à entraîner un accroissement notable de la taille des exploitations et des modifications de l'utilisation des terres. Cependant, même lorsque ces conditions sont remplies, seuls des paiements représentant un tiers du niveau maximum prévu dans le programme de préretraite pourraient se justifier dans un scénario optimal. Pratiquement un quart du total des paiements serait liéà des pertes de bien-être, c'est-à-dire que les bénéficiaires seraient des agriculteurs qui aurait pris leur retraite de toute façon. Globalement, l'intérêt économique d'un tel programme est considéré comme faible. Die finanzielle Unterstützung von Landwirten in der EU, die in den Vorruhestand gehen möchten, stellt in der Politik der GAP zur Entwicklung des ländlichen Raums ein diskretionäres Element dar; in einigen Mitgliedsstaaten wie z.B. Frankreich, Irland und Griechenland wird diese Maßnahme angeboten. Wir untersuchen, ob es möglicherweise finanziell sinnvoll wäre, solche Programme einzuführen. Dazu ziehen wir Daten aus Nordirland heran, einer Region mit relativ kleinen landwirtschaftlichen Familienbetrieben, in der sich Landwirte regelmäßig dafür aussprechen, Vorruhestandprogramme einzuführen. Wir schätzen den Nutzen, der sich aus der Einführung eines solchen Programms ergeben könnte, anhand von INLB-Daten und einer gesonderten Befragung von 350 Landwirten im Alter von 50 bis 65 Jahren. Wir stellen fest, dass es sich bei der Betriebsgröße , im Gegensatz zum Alter des Betreibers , um einen entscheidenden Faktor für die Höhe des Gewinns pro Hektar handelt. Ein Nutzen aus der Landübertragung aufgrund eines Vorruhestandprogramms beruht auf solchen Transfers, die eine bedeutsame Betriebserweiterung und veränderte Flächennutzung zur Folge haben. Selbst wenn diese Bedingungen erfüllt werden, könnten günstigstenfalls nur Rentenzahlungen in Höhe von etwa einem Drittel der gesetzlich verankerten Höchstsumme gerechtfertigt werden. Beinahe ein Viertel aller Zahlungen wäre mit Mitnahmeeffekten verbunden, d.h. Landwirten zukommen, die ohnehin den Ruhestand antreten würden. Aus ökonomischer Sicht muss ein solches Programm als schwach eingestuft werden. [source] Population Ageing, Fiscal Pressure and Tax Smoothing: A CGE Application to Australia,FISCAL STUDIES, Issue 2 2006Ross Guest Abstract This paper analyses the fiscal pressure from population ageing using an intertemporal CGE model, applied to Australia, and compares the results with those of a recent government-commissioned study. The latter study uses an alternative modelling approach based on extrapolation rather than optimising behaviour of consumers and firms. The deadweight losses from the fiscal pressure caused by population ageing are equivalent to an annual loss of consumption of $260 per person per year in 2003 dollars in the balanced-budget scenario. A feasible degree of tax smoothing would reduce this welfare loss by an equivalent of $70 per person per year. Unlike the extrapolation-based model, the CGE approach takes account of feedback effects of ageing-induced tax increases on consumption and labour supply, which in turn impact on the ultimate magnitude of fiscal pressure and therefore tax increases. However, a counterfactual simulation suggests that the difference in terms of deadweight losses between the two modelling approaches is modest, at about $30 per person per year. [source] An Economic Justification for Open Access to Essential Medicine Patents in Developing CountriesTHE JOURNAL OF LAW, MEDICINE & ETHICS, Issue 2 2009Sean Flynn This paper offers an economic rationale for compulsory licensing of needed medicines in developing countries. The patent system is based on a trade-off between the "deadweight losses" caused by market power and the incentive to innovate created by increased profits from monopoly pricing during the period of the patent. However, markets for essential medicines under patent in developing countries with high income inequality are characterized by highly convex demand curves, producing large deadweight losses relative to potential profits when monopoly firms exercise profit-maximizing pricing strategies. As a result, these markets are systematically ill-suited to exclusive marketing rights, a problem which can be corrected through compulsory licensing. Open licenses that permit any qualified firm to supply the market on the same terms, such as may be available under licenses of right or essential facility legal standards, can be used to mitigate the negative effects of government-granted patents, thereby increasing overall social welfare. [source] | ||||||||||