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Marginal Rate (marginal + rate)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	71%
Engineering	14%

Selected Abstracts

Lagrange Multipliers as Marginal Rates of Substitution in Multi-Constraint Optimization Problems

METROECONOMICA, Issue 1 2001
Christian E. Weber
This paper shows that, when a function is optimized subject to several binding constraints, some of the Lagrange multipliers in the dual problems can be interpreted as marginal rates of substitution among certain arguments in the generalized indirect objective function for the primal problem. It also shows how to calculate these Lagrange multipliers from observable price,quantity data. Three particular examples are discussed: a firm that minimizes costs subject to both fixed output and rationing constraints, a household that maximizes utility subject to both income and time constraints, and portfolio choice under uncertainty treated as a multiple constraint optimization problem. [source]

Using discrete choice experiments to value preferences for pharmacy services

INTERNATIONAL JOURNAL OF PHARMACY PRACTICE, Issue 1 2005
Dr. Katherine Payne Research fellow
Objective This paper describes the application of discrete choice experiments (DCEs), in the measurement of consumers' preferences for pharmacy services. Summary Patients' preferences for healthcare influence strongly their use of services. Quantifying revealed preferences for services (what services people use) is not always possible because either the service does not yet exist or the consumer has no experience of it. There is a need for tools that measure stated preference (what people say they will do) for healthcare, to allow development of new services. DCEs have been used in the valuation of preferences for healthcare services and interventions and can be applied usefully to the valuation of preferences for pharmacy services. DCEs assume that preferences are based on preferences for different attributes of a service, and that consumers are prepared to trade off one attribute against another, such as effectiveness versus side-effects. In a DCE study, respondents make hypothetical choices between scenarios of services with fixed attributes, but varying levels, revealing their strength of preference for attributes of that service. These data are analysed using regression, which generates coefficients that quantify the direction and magnitude of preferences. Marginal rates of substitution and willingness to pay for each attribute can be estimated, which provide powerful information for future service provision. For this approach to be applied in practice, key methodological issues must be handled explicitly, principally scenario design, attribute and level selection, orthogonality, level balance, minimal overlap and utility balance. A hypothetical example of a DCE designed for valuing consumers' preferences for a medication review service for the elderly is described. [source]

The Russian ,flat tax' reform

ECONOMIC POLICY, Issue 43 2005
Anna Ivanova
SUMMARY Russian's ,flat tax' In 2001, Russia dramatically reduced its higher rates of personal income tax (PIT), establishing a single marginal rate at the low level of 13%. In the following year, real revenue from the PIT increased by about 26%. This ,flat tax' experience has attracted much attention (and emulation), making it perhaps the most important tax reform of recent years. But it has been little studied. This paper asks whether the strong performance of PIT revenue was itself a consequence of this reform, using both macro evidence and, in particular, micro level data on the experiences of individuals and households affected by the reform to varying degrees. It concludes that there is no evidence of a strong supply side effect of the reform. Compliance, however, does appear to have improved quite substantially , by about one third, according to our estimates , though it remains unclear whether this was due to the parametric tax reform or to accompanying changes in enforcement. , Anna Ivanova, Michael Keen and Alexander Klemm [source]

On sustained economic growth with wealth effects

INTERNATIONAL JOURNAL OF ECONOMIC THEORY, Issue 1 2010
Santanu Roy
O4; D9 In a discounted one-sector convex model of optimal economic growth where utility may depend on both consumption and capital stock, I derive necessary and sufficient conditions for sustained growth (unbounded expansion of capital and consumption). Conditions for bounded growth and extinction are also outlined. Optimal paths may be non-monotone. Sustained growth may occur even though the asymptotic marginal productivity is less than the discount rate and may require the initial capital stock to be above a critical level. The behavior of the marginal rate of substitution between consumption and capital plays a crucial role in the conditions. [source]

Doing Wonders with an Egg: Optimal Re-distribution When Households Differ in Market and Non-Market Abilities

JOURNAL OF PUBLIC ECONOMIC THEORY, Issue 3 2003
Alessandro Balestrino
The paper studies non-linear income taxation and linear commodity taxation in a household production context with households differentiated by market and non-market ability. In such a setting, there is an efficiency motive for re-distribution which is independent from the usual equity motive, and operates also when the social planner is indifferent to utility inequality. As a consequence, some of the policy prescriptions applicable to the case in which households differ in market ability only do not hold when households differ also in non-market ability. For instance, re-distribution is not necessarily from high- to low-wage households, and it is not necessarily true that the marginal rate of income tax should be zero for high incomes and positive for low incomes. In some cases, re-distribution may accentuate rather than lessen utility inequality, and can reverse the direction of income inequality relative to the laissez-faire equilibrium. Furthermore, contrary to Atkinson-Stiglitz, it may be optimal to use indirect and direct taxation simultaneously even when the utility function is separable in commodities and labour. [source]

The dynamic efficiency of the Ramsey model with endogenous labour participation rate

OPTIMAL CONTROL APPLICATIONS AND METHODS, Issue 3 2001
João Ricardo Faria
Abstract This paper incorporates the hypothesis of labour participation rate into the Ramsey model. It is shown that the economy can be dynamically inefficient if the average productivity of capital is greater than the sum of the rate of time preference, the population growth rate, the depreciation rate and the marginal rate of substitution between labour and consumption. The modified golden rule holds when the wage rate is equal to the marginal rate of substitution between labour and consumption. However, there is no guarantee that it will happen, since labour supply is driven by capital allocation decisions. Copyright © 2001 John Wiley & Sons, Ltd. [source]

Understanding Economic Crises: The Great Depression and the 2008 Recession

THE ECONOMIC RECORD, Issue 2010
LEE E. OHANIAN
Economic crises, involving large and persistent declines in output and employment, are puzzles, particularly in developed countries with economies that typically function at a high level. This article analyses the Great Depression and the 2008 recession using recent developments in business cycle diagnostic procedures, and finds that the key to both episodes is understanding labour market distortions that resulted in the marginal product of labour being much higher than the marginal rate of substitution between consumption and leisure. This finding stands in sharp contrast to the received wisdom, which focuses on the role of banking crises and capital market distortions. The article also discusses possible hypotheses for these labour market distortions. [source]

Imperfect Tax Compliance and the Optimal Provision of Public Goods

BULLETIN OF ECONOMIC RESEARCH, Issue 1 2003
Alessandro Balestrino
Our aim in this paper is to investigate whether the presence of imperfect income tax compliance affects the optimal provision of public goods within a framework in which public expenditure is financed by a general income tax that also accomplishes redistributive goals. We first derive the income tax structure, and then a generalized Samuelson rule. We argue that, under imperfect income tax compliance, it is desirable to distort public,good supply downwards, in the sense that the sum of marginal rates of substitution between public and private consumption must exceed their marginal rate of transformation. [source]

Mortality dynamics and population regulation in Bemisia tabaci

ENTOMOLOGIA EXPERIMENTALIS ET APPLICATA, Issue 2 2005
Steven E. Naranjo
Abstract Natural mortality is an important determinant of the population dynamics of a species, and an understanding of mortality forces should aid in the development of better management strategies for insect pests. An in situ, observational method was used to construct cohort-based life tables for Bemisia tabaci (Gennadius) Biotype B (Homoptera: Aleyrodidae) over 14 generations on cotton in central Arizona, USA, from 1997 to 1999. In descending order, median marginal rates of mortality were highest for predation, dislodgment, unknown causes, egg inviability, and parasitism. The highest mortality occurred during the 4th nymphal stadium, and the median rate of immature survival over 14 generations was 6.6%. Predation during the 4th nymphal stadium was the primary key factor. Irreplaceable mortality was highest for predation and dislodgment, with the absence of these mortality factors leading to the greatest increases in estimated net reproduction. There was little evidence of direct or delayed density-dependence for any mortality factor. Wind, rainfall, and predator densities were associated with dislodgment, and rates of predation were related to densities of Geocoris spp., Orius tristicolor (White), Chrysoperla carnea s.l. Stephens, and Lygus hesperus Knight. Simulations suggest that immigration and emigration play important roles in site-specific dynamics by explaining departures from observed population trajectories based solely on endogenous reproduction and mortality. By a direct measurement of these mortality factors and indirect evidence of adult movement, we conclude that efficient pest management may be best accomplished by fostering greater mortality during the 4th stadium, largely through a conservation of predators and by managing immigrating adult populations at their sources. [source]

Estimation of the consumption CAPM with imperfect sample separation information

INTERNATIONAL JOURNAL OF FINANCE & ECONOMICS, Issue 4 2008
Andrei Semenov
Abstract We propose a consumption-based capital asset pricing model consumption (CAPM), in which the pricing kernel is calculated as the average of individuals' intertemporal marginal rates of substitution weighted by the probabilities of holding the asset in question. These probabilities are conditional on available imperfect sample separation information and are estimated simultaneously with the parameters of Euler equations. Using data from the US Consumer Expenditure Survey, we find that the consumption CAPM with probability-weighted agents yields a more precise estimate of the agent's risk aversion compared with the model, in which the available imperfect information on asset-holding status is erroneously regarded as a perfect sample separation indicator. Copyright © 2007 John Wiley & Sons, Ltd. [source]

Lagrange Multipliers as Marginal Rates of Substitution in Multi-Constraint Optimization Problems

Comparing methods for the multi-response design problem

QUALITY AND RELIABILITY ENGINEERING INTERNATIONAL, Issue 5 2001
John F. Kros
Abstract One approach to solving multiple response engineering problems is to combine the individual responses into one unifying objective. In tility theory, several characteristics are used to compare and contrast multiple objective techniques. These are risk aversion, marginal rates of substitution, and the relationship of the responses in the combined function. Perhaps unknown to the user, multiple response techniques carry strong assumptions regarding these characteristics. This paper investigates four commonly-used multiple objective techniques and demonstrates that each method contains assumptions about these characteristics which are not intuitively evident to a user. Copyright © 2001 John Wiley & Sons, Ltd [source]

Evaluating off-site environmental mitigation using choice modelling,

AUSTRALIAN JOURNAL OF AGRICULTURAL & RESOURCE ECONOMICS, Issue 4 2008
Geoffrey N. Kerr
Evaluation of off-site mitigation entails comparison of utility changes between two sites. Choice modelling has been used to identify community willingness to trade-off attributes for two different types of stream in New Zealand. Estimated utility functions are used to derive marginal rates of substitution and stream attribute part worths which can be used to design or evaluate both on-site and off-site mitigation policy. Latent class multinomial logit models identified classes of citizens who valued stream attributes quite differently. Significant differences in values for some attributes on different stream types imply heterogeneous mitigation ratios across environmental attributes. [source]