| 1. |
- Hauge, Karen Evelyn, et al.
(författare)
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Keeping others in our mind or in our heart? Distribution games under cognitive load
- 2014
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- It has recently been argued that giving is spontaneous while greed is calculated (Rand et al. 2012). If greed is calculated we would expect that cognitive load, which is assumed to reduce the influence of cognitive processes, should affect greed. In this paper we study both charitable giving and the behavior of dictators under high and low cognitive load, to test if greed is affected by the load. In the dictator games we use both a give frame, where the dictators are given an amount that they may share with a partner, and a take frame, where dictators may take from an amount initially allocated to the partner. The results show consistently that the behavioral effect in terms of allocated money of the induced load is small if at all existent. At the same time, follow-up questions indicate that the subjects’ decisions are more driven by their feelings and less driven by their thoughts under cognitive load.
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| 2. |
- Hauge, K. E., et al.
(författare)
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Keeping others in our mind or in our heart? Distribution games under cognitive load
- 2016
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Ingår i: Experimental Economics. - : Springer Science and Business Media LLC. - 1386-4157 .- 1573-6938. ; 19:3, s. 562-576
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Tidskriftsartikel (refereegranskat)abstract
- It has recently been argued that giving is spontaneous while greed is calculated (Rand et al., in Nature 489:427-430, 2012). If greed is calculated we would expect that cognitive load, which is assumed to reduce the influence of cognitive processes, should affect greed. In this paper we study both charitable giving and the behavior of dictators under high and low cognitive load to test if greed is affected by the load. This is tested in three different dictator game experiments. In the dictator games we use both a give frame, where the dictators are given an amount that they may share with a partner, and a take frame, where dictators may take from an amount initially allocated to the partner. The results from all three experiments show that the behavioral effect in terms of allocated money of the induced load is small if at all existent. At the same time, follow-up questions indicate that the subjects' decisions are more impulsive and less driven by their thoughts under cognitive load.
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| 3. |
- Johansson, Lars-Olof, 1957, et al.
(författare)
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Goal conflicts in political decision making: a survey of municipality politicians' view of road pricing.
- 2004
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Ingår i: Environment & Planning C: Government & Policy. - 0263-774X. ; 21:4, s. 615-624
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Tidskriftsartikel (refereegranskat)abstract
- Investigates the existence of goal conflicts in political decision-making in the case of municipality politicians in Sweden on the issue of road pricing scheme. Goals of municipality politicians other than reducing car use; Possibility of failure in achieving environmental goals because of goal conflicts.
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| 4. |
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| 5. |
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| 6. |
- Johansson-Stenman, Olof, 1966, et al.
(författare)
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Hypothetical bias in choice experiments: Within versus between subject tests
- 2007
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- A choice experiment eliciting environmental values is set up in order to test for hypothetical bias based on both within and between sample designs. A larger hypothetical bias was found in the latter case, which explains parts of the previous diverging results in the literature. People seem to prefer to do what they say they would do.
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| 7. |
- Johansson-Stenman, Olof, 1966, et al.
(författare)
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Self image and choice experiments: hypothetical and actual willingness to pay
- 2003
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- This paper proposes that people derive utility from a positive self-image, influenced by ethical views, internal honesty, and consistency between sequential choices. A model is tested by conducting the same choice-experiment for two WWF-campaigns in three different contexts. It predicts that marginal WTP for contributions to these campaigns is highest when choices are hypothetical, lower in a real-money experiment that follows a hypothetical experiment, and lowest when real-money choices are made directly. Additionally, it predicts that marginal WTP decreases with the scale of financial incentives in a real-money experiment. The empirical results are consistent with these hypotheses.
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| 8. |
- Johansson-Stenman, Olof, 1966, et al.
(författare)
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Self-image and valuation of moral goods: Stated versus actual willingness to pay
- 2012
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Ingår i: Journal of Economic Behavior & Organization. - : Elsevier BV. - 0167-2681. ; 84:3, s. 879-891
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Tidskriftsartikel (refereegranskat)abstract
- Hypothetical bias in stated-preference methods appears sometimes to be very large, and other times non-existent. This is here largely explained by a model where people derive utility from a positive self-image associated with morally commendable behavior. The results of a choice experiment are consistent with the predictions of this model: the hypothetical marginal willingness to pay (MWTP) for a moral good (contributions to a WWF project) is significantly higher than the corresponding real-money MWTP, whereas no hypothetical bias is seen for an amoral good (a restaurant voucher). Moreover, the evidence suggests that also the real-money MWTP for the moral good is biased upwards, in the sense that it appears to be higher within than outside the experimental context. (C) 2012 Elsevier B.V. All rights reserved.
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| 9. |
- Johansson-Stenman, Olof, 1966, et al.
(författare)
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Self-Image and Valuation of Moral Goods: Stated versus Real Willingness to Pay
- 2011
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- Hypothetical bias in stated-preference methods appears sometimes to be very large, and other times non-existent. This is here largely explained by a model where people derive utility from a positive self-image associated with morally commendable behavior. The results of a choice experiment are consistent with the predictions of this model; the hypothetical marginal willingness to pay (MWTP) for a moral good (contributions to a WWF project) is significantly higher than the corresponding real MWTP, whereas no hypothetical bias is present for an amoral good (a restaurant voucher). Moreover, both the theoretical model and the experimental evidence suggest that also the real MWTP for the moral good is biased upwards by being higher within than outside the experimental context.
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| 10. |
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| 11. |
- Alpizar, Francisco, et al.
(författare)
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Anonymity, Reciprocity, and Conformity: Evidence from Voluntary Contributions to a National Park in Costa Rica
- 2007
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- We investigate the role of anonymity, reciprocity, and conformity for voluntary contributions, based on a natural field experiment conducted at a national park in Costa Rica. Contributions made in public in front of the solicitor are 25% higher than contributions made in private. Giving subjects a small gift before requesting a contribution increases the likelihood of a positive contribution. At the same time, the conditional contribution decreases. The total effect of giving a gift is positive but small, and taking the cost of the gift into account, it is far from profitable. When the subjects are told that the typical contribution of others is $2 (a small contribution), the probability of a contribution increases and the conditional contribution decreases, compared with providing no reference information. Providing a high reference level ($10) increases the conditional contributions. Overall, the total effects have the expected signs, although the magnitudes are smaller than what one might have expected based on existing evidence from laboratory experiments.
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| 12. |
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| 13. |
- Alpizar, Francisco, 1974, et al.
(författare)
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Does context matter more for hypothetical than for actual contributions? Evidence from a natural field experiment
- 2007
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- We investigate the importance of the social context for people’s voluntary contributions to a national park in Costa Rica, using a natural field experiment. Some subjects make actual contributions while others state their hypothetical contribution. Both the degree of anonymity and provided information about the contributions of others influence subject contributions in the hypothesized direction. We do find a substantial hypothetical bias with regard to the amount contributed. However, the influence of the social contexts is about the same when the subjects make actual monetary contributions as when they state their hypothetical contributions. Our results have important implications for validity testing of stated preference methods: a comparison between hypothetical and actual behavior should be done for a given social context.
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| 14. |
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| 15. |
- Alpizar, Francisco, 1974, et al.
(författare)
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How Much Do We Care About Absolute versus Relative Income and Consumption?
- 2005
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Ingår i: Journal of Economic Behavior and Organization. - : Elsevier BV. - 0167-2681. ; 56, s. 405-421
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Tidskriftsartikel (refereegranskat)abstract
- We find, using survey-experimental methods, that most individuals are concerned with both relative income and relative consumption of particular goods. The degree of concern varies in the expected direction depending on the properties of the good. However, contrary to what has been suggested in the previous literature, we find that relative consumption is also important for vacation and insurance, which are typically seen as non-positional goods. Further, absolute consumption is also found to be important for cars and housing, which are widely regarded as highly positional. © 2004 Published by Elsevier B.V.
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| 16. |
- Alpizar, Francisco, 1974, et al.
(författare)
-
How Much Do We Care About Absolute Versus Relative Income and Consumption?
- 2001
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- We find, using survey-experimental methods, that most individuals are concerned with both relative income and relative consumption of particular goods. The degree of concern varies in the expected direction depending on the properties of the good. However, contrary to what has been suggested in the previous literature, we find that relative consumption is also important for vacation and insurance, which are typically seen as non-positional goods. Further, absolute consumption is also found to be important for cars and housing, which are widely regarded as highly positional. Implications for Pareto-efficient taxation are illustrated using the results from the experiment.
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| 17. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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A Note on Optimal Taxation, Status Consumption, and Unemployment
- 2020
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- Existing research on optimal taxation in economies with status-driven relative consumption assumes that the labor market is competitive, despite the fact that real world labor markets are typically characterized by involuntary unemployment. We show how the marginal tax policy ought to be modified to simultaneously account for positional consumption externalities and equilibrium unemployment, and find that interaction effects between these two market failures are crucial determinants of the marginal tax structure. In certain cases, the policy incentive to tax away positional externalities vanishes completely, and negative positional externalities may even lead to lower marginal taxation, under involuntary unemployment.
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| 18. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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A note on optimal taxation, status consumption, and unemployment
- 2021
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Ingår i: Journal of Public Economics. - : Elsevier BV. - 0047-2727 .- 1879-2316. ; 200
-
Tidskriftsartikel (refereegranskat)abstract
- Existing research on optimal taxation in economies with status-driven relative consumption (implicitly) assumes that there is no involuntary unemployment, despite ample evidence that real world labor markets are typically characterized by such unemployment. We show how the marginal tax policy ought to be modified to simultaneously account for positional consumption externalities and equilibrium unemployment, and find that interaction effects between these two market failures are crucial determinants of the marginal tax structure. In certain cases, the policy incentive to tax away positional externalities vanishes completely, and negative positional externalities may even lead to lower marginal taxation, under involuntary unemployment. (c) 2021 Elsevier B.V. All rights reserved.
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| 19. |
- Aronsson, Thomas, et al.
(författare)
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Animal Welfare and Social Decisions
- 2011
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- This paper analyzes the standard welfare economics assumption of anthropocentric welfarism, i.e., that only human well-being counts intrinsically. Alternatives where animal welfare matters intrinsically are explored theoretically, based on moral philosophical literature, and empirically where the general public‘s ethical preferences are measured through a survey with a representative sample in Sweden. It is concluded that welfare economics should be generalized in order to encompass the idea that animal welfare should sometimes matter intrinsically.
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| 20. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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Charity as income redistribution : a model with optimal taxation, status, and social stigma
- 2019
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- In light of the increasing inequality in many countries, this paper analyzes redistributive charitable giving from the rich to the poor in a model of optimal nonlinear income taxation. Our framework integrates (i) public and private redistribution, (ii) the warm glow of giving and stigma of receiving charitable donations, and (iii) status concerns emanating from social comparisons with respect to charitable donations and private consumption. Whether charity should be taxed or supported largely depends on the relative strengths of the warm glow of giving and the stigma of receiving charity, respectively, and on the positional externalities caused by charitable donations. In addition, imposing stigma on the mimicker (which relaxes the self-selection constraint) strengthens the case for subsidizing charity. We also consider a case where the government is unable to target the charitable giving through a direct tax instrument, and we examine how the optimal marginal income tax structure should be adjusted in response to charitable giving. Numerical simulations demonstrate that the quantitative effects of the aforementioned mechanisms can be substantial.
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| 21. |
- Aronsson, Thomas, 1963-, et al.
(författare)
-
Charity, status, and optimal taxation : welfarist and paternalist approaches
- 2019
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- This paper deals with tax policy responses to charitable giving, defined in terms of voluntary contributions to a public good, to which the government also contributes through public revenue; the set of tax instruments contains general, nonlinear taxes on income and charitable giving. In addition to consumption, leisure and a public good, individuals obtain utility from the warm glow of giving and social status generated by their relative contributions to charity as well as their relative consumption compared with others. We analyze the conditions under which it is optimal to tax or subsidize charitable giving and derive corresponding optimal policy rules. Another aim of the paper is to compare the optimal tax policy and public good provision by a conventional welfarist government with those by two kinds of paternalist governments: The first kind does not respect the consumer preferences for status in terms of relative giving and relative consumption, while the second kind in addition does not respect preferences for warm glow of giving. The optimal policy rules for marginal taxation and public good provision are similar across governments, except for the stronger incentive to tax charitable giving at the margin under the more extensive kind of paternalism. Numerical simulations supplement the theoretical results.
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| 22. |
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| 23. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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Charity, Status, and Optimal Taxation: Welfarist and Non-Welfarist Approaches
- 2021
-
Rapport (övrigt vetenskapligt/konstnärligt)abstract
- This paper analyzes optimal taxation of charitable giving to a public good in a Mirrleesian framework with social comparisons. Leisure separability together with zero transaction costs of giving imply that charitable giving should be subsidized to such an extent that governmental contributions are completely crowded out, regardless of whether the government acknowledges warm glows of giving. Stronger concerns for relative charitable giving and larger transaction costs support lower marginal subsidies, whereas relative consumption concerns work in the other direction. A dual screening approach, where charitable giving constitutes an indicator of wealth, is also presents. Numerical simulations supplement the theoretical results.
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| 24. |
- Aronsson, Thomas, et al.
(författare)
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Conspicuous Leisure : Optimal Income Taxation When Both Relative Consumption and Relative Leisure Matter
- 2013
-
Ingår i: Scandinavian Journal of Economics. - : Wiley. - 0347-0520 .- 1467-9442. ; 115:1, s. 155-175
-
Tidskriftsartikel (refereegranskat)abstract
- In previous studies on public policy under relative-consumption concerns, leisure comparisons have been ignored. In this paper, we consider a two-type optimal non-linear income tax model, in which people care about both their relative consumption and their relative leisure. Increased consumption positionality typically implies higher marginal income tax rates for both ability types, whereas leisure positionality has an offsetting role. However, this offsetting role is not symmetric; concern about relative leisure implies a progressive income tax component (i.e., a component that is larger for the high-ability type than for the low-ability type). Leisure positionality does not modify the policy rule for public-good provision.
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| 25. |
- Aronsson, Thomas, et al.
(författare)
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Conspicuous Leisure: Optimal Income Taxation when both Relative Consumption and Relative Leisure Matter
- 2009
-
Rapport (övrigt vetenskapligt/konstnärligt)abstract
- Previous studies on public policy under relative consumption concerns have ignored the role of leisure comparisons. This paper considers a two-type optimal nonlinear income tax model where people care both about their relative consumption and their relative leisure. Increased consumption positionality typically implies higher marginal income tax rates for both the high-ability and the low-ability type, whereas leisure positionality has an offsetting role. However, this offsetting role is not symmetric; concern about relative leisure implies a progressive income tax component, i.e., a component that is larger for the high-ability than for the low-ability type. Moreover, leisure positionality does not modify the policy rule for public good provision when the income tax is optimally chosen.
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| 26. |
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| 27. |
- Aronsson, Thomas, et al.
(författare)
-
Genuine Saving and Conspicuous Consumption
- 2014
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- Much evidence suggests that people are concerned with their relative consumption, i.e., their consumption in relation to the consumption of others. Yet, the social costs of conspicuous consumption have so far played little (or no) role in savings-based indicators of sustainable development. The present paper examines the implications of such behavior for measures of sustainable development by deriving analogues to genuine saving when people are concerned with their relative consumption. Unless the resource allocation is a social optimum, an indicator of positional externalities must be added to genuine saving to arrive at the proper measure of intertemporal welfare change. A numerical example based on U.S. and Swedish data suggests that conventional measures of genuine saving (which do not reflect conspicuous consumption) are likely to largely overestimate this welfare change. We also show how relative consumption concerns affect the way public investment ought to be reflected in genuine saving.
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| 28. |
- Aronsson, Thomas, et al.
(författare)
-
Genuine Saving and Conspicuous Consumption
- 2016
-
Rapport (övrigt vetenskapligt/konstnärligt)abstract
- Much evidence suggests that people are concerned with their relative consumption, i.e., their own consumption relative to that of others. Yet, conspicuous consumption and the corresponding social costs have so far been ignored in savings-based indicators of sustainable development. The present paper examines the implications of relative consumption concerns for measures of sustainable development by deriving analogues to genuine saving when people are concerned with their relative consumption. Unless the positional externalities have been fully internalized, an indicator of such externalities must be added to genuine saving to arrive at the proper measure of intertemporal welfare change. A numerical example based on U.S. and Swedish data suggests that conventional measures of genuine saving (which do not reflect conspicuous consumption) are likely to largely overestimate this welfare change. We also show how relative consumption concerns affect the way public investment ought to be reflected in genuine saving.
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| 29. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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Genuine Saving and Positional Externalities
- 2017
-
Ingår i: International Economic Review. - : Wiley. - 0020-6598 .- 1468-2354. ; 58:4, s. 1155-1190
-
Tidskriftsartikel (refereegranskat)abstract
- Much evidence suggests that people are concerned with their relative consumption. Yet, positional externalities have so far been ignored in savings-based indicators of sustainable development. This article examines the implications of relative consumption concerns for measures of sustainable development by deriving analogues to genuine saving when people are concerned with their relative consumption. Unless the positional externalities have been internalized, an indicator of such externalities must be added to genuine saving to arrive at the proper measure of welfare change. We also show how relative consumption concerns affect the way public investment ought to be reflected in genuine saving.
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| 30. |
- Aronsson, Thomas, et al.
(författare)
-
Inequality Aversion and Marginal Income Taxation
- 2016
-
Rapport (övrigt vetenskapligt/konstnärligt)abstract
- This paper deals with tax policy responses to inequality aversion by examining the first-best Pareto-efficient marginal tax structure when people are inequality averse. In doing so, we distinguish between four different and widely used models of inequality aversion. The results show that empirically and experimentally quantified degrees of inequality aversion have potentially very strong implications for Pareto-efficient marginal income taxation. It also turns out that the exact type of inequality aversion (self-centered vs. non-self-centered), and the measures of inequality used, matter a great deal. For example, based on simulation results mimicking the disposable income distribution in the US in 2013, the preferences suggested by Fehr and Schmidt (1999) imply monotonically increasing marginal income taxes, with large negative marginal tax rates for low-income individuals and large positive marginal tax rates for high-income individuals. In contrast, the often considered similar model by Bolton and Ockenfels (2000) implies close to zero marginal income tax rates for all.
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| 31. |
- Aronsson, Thomas, 1963-, et al.
(författare)
-
Inequality Aversion, Externalities, and Pareto-Efficient Income Taxation
- 2020
-
Rapport (övrigt vetenskapligt/konstnärligt)abstract
- This paper analyzes Pareto-efficient marginal income taxation taking into account externalities induced through individual inequality aversion, meaning that people have preferences for equality. In doing so, we distinguish between four different and widely used models of inequality aversion. The results show that empirically and experimentally quantified degrees of inequality aversion have potentially very strong implications for Pareto-efficient marginal income taxation. It also turns out that the type of inequality aversion (self-centered vs. non-self-centered), and the specific measures of inequality used, matter a great deal. For example, based on simulation results mimicking the disposable income distribution in the U.S., the preferences suggested by Fehr and Schmidt (1999) imply monotonically increasing marginal income taxes, with large negative marginal tax rates for low-income individuals and large positive marginal tax rates for high-income ones. In contrast, the in many respects comparable model by Bolton and Ockenfels (2000) implies close to zero marginal income tax rates for all.
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| 32. |
- Aronsson, Thomas, 1963-, et al.
(författare)
-
Keeping up with the Joneses, the Smiths and the Tanakas : on international tax coordination and social comparisons
- 2015
-
Ingår i: Journal of Public Economics. - : Elsevier. - 0047-2727 .- 1879-2316. ; 131, s. 71-86
-
Tidskriftsartikel (refereegranskat)abstract
- Recent evidence suggests that social comparisons between people in different countries have become more important over time due to globalization. This paper deals with optimal nonlinear income taxation in an international setting, where consumers derive utility from their relative consumption compared both with other domestic residents and people in another country. The optimal tax policy in our framework reflects both correction for positional externalities and redistributive aspects of such correction due to the incentive constraint facing each government. If the national governments behave as Nash competitors to each other, the resulting tax policy only internalizes the externalities that are due to within-country comparisons, whereas the tax policy chosen by the leader country in a Stackelberg game also to some extent reflects between-country comparisons. We also derive globally Pareto-efficient tax policies in a cooperative framework, and conclude that there are potentially large welfare gains of international tax policy coordination.
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| 33. |
- Aronsson, Thomas, et al.
(författare)
-
Keeping up with the Joneses, the Smiths and the Tanakas: On International Tax Coordination and Social Comparisons
- 2015
-
Rapport (övrigt vetenskapligt/konstnärligt)abstract
- Much evidence suggests that between-country social comparisons have become more important over time due to globalization. This paper analyzes optimal income taxation in a multi-country economy, where consumers derive utility from their relative consumption compared with both other domestic residents and people in other countries. The optimal tax policy in our framework reflects both correction for positional externalities and redistributive aspects of such correction due to the incentive constraint facing each government. If the national governments behave as Nash competitors to one another, the resulting tax policy only internalizes the externalities that are due to within-country comparisons, whereas the tax policy chosen by the leader country in a Stackelberg game also to some extent reflects between-country comparisons. We also derive globally efficient tax policies in a cooperative framework, and conclude that there are potentially large welfare gains of international tax policy coordination resulting from cross-country social comparisons.
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| 34. |
- Aronsson, Thomas, 1963-, et al.
(författare)
-
Optimal Second-Best Taxation When Individuals Have Social Preferences
- 2020
-
Rapport (övrigt vetenskapligt/konstnärligt)abstract
- Models where people derive well-being from motives other than material self-interest – including those rooted in status concerns – are surprisingly scarce in the study of optimal redistributive taxation. In fact, despite extensive evidence from experimental research, other-regarding behavior driven by prosocial preferences is more or less absent in this literature. The purpose of the present paper is to start filling this gap by analyzing the implications of prosocial preferences related to equality and efficiency for optimal income taxation. In doing so, we take a broad perspective by examining three well-known models of social preferences developed by Fehr and Schmidt (1999), Bolton and Ockenfels (2000), and Charness and Rabin (2002), respectively. Our contribution is to analyze the implications of these three social preference models for optimal redistributive income taxation based on a discrete version of the Mirrleesian (1971) framework of optimal nonlinear income taxation. We find that social preferences may have a considerable impact on the structure of marginal income taxation, and that interactions between externality correction and redistributive aspects of taxation are likely to play an important role for the optimal tax structure.
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| 35. |
- Aronsson, Thomas, et al.
(författare)
-
Optimal Taxation and Other-Regarding Preferences
- 2023
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Annan publikation (övrigt vetenskapligt/konstnärligt)abstract
- The present paper analyzes optimal redistributive income taxation in a Mirrleesian framework extended with other-regarding preferences at the individual level. We start by developing a general model where the other-regarding preference component of the utility functions is formulated to encompass almost any form of preferences for other people’s disposable income, and then continue with four prominent special cases. Two of these reflect self-centered inequality aversion, based on Fehr and Schmidt (1999) and Bolton and Ockenfels (2000), whereas the other two reflect non-self-centered inequality aversion, where people have preferences for a low Gini coefficient and a high minimum income level in society, respectively. We find that other-regarding preferences may substantially increase the marginal tax rates, including the top rates, and that different types of other-regarding preferences have very different implications for optimal taxation.
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| 36. |
- Aronsson, Thomas, et al.
(författare)
-
Paternalism against Veblen: Optimal Taxation and Non-Respected Preferences for Social Comparisons
- 2014
-
Rapport (övrigt vetenskapligt/konstnärligt)abstract
- This paper deals with optimal income taxation and relative consumption under a welfarist government that fully respects people’s preferences and a paternalist government that does not share the consumer preference for relative consumption. Consistent with previous findings, relative consumption concerns typically lead to higher marginal income tax rates in the welfarist case. A remarkable result is that the optimal tax rules turn out to be very similar when people’s preferences for social comparisons are not respected. Indeed, if the relative consumption concerns are based on mean value comparisons and all consumers are equally positional, or if they are driven by within-type comparisons, the paternalist and welfarist governments can implement their respective first-best allocations through exactly the same marginal income tax formulas. Yet, also in these cases, there are some remaining differences that follow from second-best considerations.
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| 37. |
- Aronsson, Thomas, 1963-, et al.
(författare)
-
Paternalism against Veblen: Optimal Taxation and Non-respected Preferences for Social Comparisons
- 2018
-
Ingår i: American Economic Journal-Economic Policy. - : American Economic Association. - 1945-7731 .- 1945-774X. ; 10:1, s. 39-76
-
Tidskriftsartikel (refereegranskat)abstract
- This paper compares optimal nonlinear income tax policies of welfarist and paternalist governments, where the latter does not respect individual preferences regarding relative consumption. Consistent with previous findings, relative consumption concerns typically induce a welfarist government to increase the marginal tax rates to internalize positional externalities. Remarkably, the optimal marginal tax rules are often very similar in the paternalist case, where such externalities are not taken into account. We identify several cases where the marginal tax rules are indeed identical between the governments. Numerical simulations show that marginal and average tax levels and the overall redistribution are often also similar.
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| 38. |
- Aronsson, Thomas, et al.
(författare)
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POSITIONAL CONCERNS IN AN OLG MODEL: OPTIMAL LABOR AND CAPITAL INCOME TAXATION
- 2009
-
Rapport (övrigt vetenskapligt/konstnärligt)abstract
- This paper concerns optimal income taxation under asymmetric information in a two-type overlapping generations model, where people care about their relative consumption compared to others. The appearance of positional concerns affects the policy choices via two channels: (i) the size of the average degree of positionality and (ii) positionality differences between the (mimicked) low-ability type and the mimicker. Under plausible empirical estimates, the marginal labor income tax rates become substantially larger, and the absolute value of the marginal capital income tax rate implemented for the low-ability type becomes substantially smaller, compared to the conventional optimal income tax model. In addition to measures of reference consumption based on the average consumption, results for the cases of withingeneration and upward comparisons are also presented.
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| 39. |
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| 40. |
- Aronsson, Thomas, et al.
(författare)
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Positional Concerns with Multiple Reference Points: Optimal Income Taxation and Public Goods in an OLG Model
- 2008
-
Rapport (övrigt vetenskapligt/konstnärligt)abstract
- This paper concerns optimal income taxation and provision of a state-variable public good under asymmetric information in a two-type overlapping generations model, where people care about their relative consumption. Each individual may compare his/her own current consumption with his/her own past consumption as well as with other people's current and past consumption. The appearance of positional concerns affects the policy choices via two channels: (i) the size of the average degree of positionality and (ii) positionality differences between the (mimicked) low-ability type and the mimicker. Under plausible empirical estimates, the marginal labor income tax rates become substantially larger, and the absolute value of the marginal capital income tax rate of the low-ability type becomes substantially smaller, compared to the conventional optimal income tax model. The extent by which the rule for public provision should be modified depends crucially on the preference elicitation format.
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| 41. |
- Aronsson, Thomas, et al.
(författare)
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POSITIONAL PREFERENCES IN TIME AND SPACE: IMPLICATIONS FOR OPTIMAL INCOME TAXATION
- 2010
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- This paper concerns optimal nonlinear taxation in an OLG model with two ability-types, where people care about their own consumption relative to (i) other people’s current consumption, (ii) own past consumption, and (iii) other people’s past consumption. We show that intertemporal consumption comparisons affect the marginal income tax structure in the same qualitative way as comparisons based on other people’s current consumption. Based on available empirical estimates, comparisons with other people’s current and previous consumption tend to substantially increase the optimal marginal labor income tax rates, while they may either increase or decrease the optimal marginal capital income tax rates.
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| 42. |
- Aronsson, Thomas, et al.
(författare)
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Positional preferences in time and space: Optimal income taxation with dynamic social comparisons
- 2014
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Ingår i: Journal of Economic Behavior & Organization. - : Elsevier BV. - 0167-2681 .- 1879-1751. ; 101, s. 1-23
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Tidskriftsartikel (refereegranskat)abstract
- This paper concerns optimal redistributive non-linear income taxation in an OLG model, where people care about their own consumption relative to (i) other people's current consumption, (ii) own past consumption, and (iii) other people's past consumption. We show that both (i) and (iii) affect the marginal income tax structure whereas (ii) does not. We also derive conditions under which atemporal and intertemporal consumption comparisons give rise to exactly the same tax policy responses. On the basis of the available empirical estimates, comparisons with other people's current and past consumption tend to substantially increase the optimal marginal labor income tax rates. Yet, such comparisons may either increase or decrease the optimal marginal capital income tax rates. (C) 2014 The Authors. Published by Elsevier B.V. All rights reserved. EL AB, 1990, AMERICAN ECONOMIC REVIEW102 ANNUAL MEETING OF THE AMERICAN ECONOMIC
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| 43. |
- Aronsson, Thomas, et al.
(författare)
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Publicly Provided Private Goods and Optimal Taxation when Consumers Have Positional Preferences
- 2013
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- This paper analyzes optimal differential commodity taxation, together with optimal nonlinear income taxation, in order to deal with positional preferences. It also derives the optimal public provision of private goods both when differential commodity taxation is feasible and when it is not. It is shown that publicly provided non-positional private goods which are (possibly imperfect) substitutes for positional private goods should be used as a corrective instrument even if the tax system is optimal, i.e. even when differential commodity taxation is feasible. An exception is the special case where all consumers contribute equally much to the positional externality, in which the commodity tax constitutes a perfect instrument for internalizing the positional externality.
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| 44. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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Publicly provided private goods and optimal taxation when consumers have positional preferences
- 2014
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- This paper analyzes optimal differential commodity taxation, together with optimal nonlinear income taxation, in order to deal with positional preferences. It also derives the optimal public provision of private goods both when differential commodity taxation is feasible and when it is not. It is shown that publicly provided non-positional private goods which are (possibly imperfect) substitutes for positional private goods should be used as a corrective instrument even if the tax system is optimal, i.e. even when differential commodity taxation is feasible. An exception is the special case where all consumers contribute equally much to the positional externality, in which the commodity tax constitutes a perfect instrument for internalizing the positional externality.
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| 45. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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Redistribution through Charity and Optimal Taxation when People are Concerned with Social Status
- 2016
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- This paper deals with tax policy responses to charitable giving based on a model of optimal redistributive income taxation. The major contribution is the simultaneous treatment of (i) warm-glow and stigma effects of charitable donations; (ii) that the warm glow of giving and stigma of receiving charity may to some extent depend on relative comparisons; and (iii) that people are also concerned with their relative consumption more generally. Whether charity should be taxed or supported turns out to largely depend on the relative strengths of the warm glow of giving and the stigma of receiving charity, respectively, and on the positional externalities caused by charitable donations. In addition, imposing stigma on the mimicker (via a relaxation of the self-selection constraint) strengthens the case for subsidizing charity. We also consider a case where the government is unable to target the charitable giving through a direct tax instrument, and examine how the optimal marginal income tax structure is adjusted in response to charitable giving.
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| 46. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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Social Comparisons and Optimal Taxation in a Small Open Economy
- 2016
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- Almost all previous studies on optimal taxation and status consumption are based on closed model-economies. This paper analyzes how international capital mobility – which may constrain the use of capital income taxation – affects the optimal redistributive income tax policy in a small open economy when consumers care about their relative consumption. If the government can perfectly observe (and tax) returns on savings abroad, it is shown that the policy rules for marginal labor and capital income taxation derived for a closed economy largely carry over to the small open economy analyzed here. However, if these returns are unobserved by the government, the marginal tax policy rules will be very different from those pertaining to closed model-economies. In this case, capital income taxes on domestic savings will be completely ineffective, since such taxes would induce the consumers to move their savings abroad. The labor income tax must then indirectly also reflect the corrective purpose that the absent capital income tax would otherwise have had.
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| 47. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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Social Comparisons and Optimal Taxation in a Small Open Economy
- 2019
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Ingår i: Scandinavian Journal of Economics. - : John Wiley & Sons. - 0347-0520 .- 1467-9442. ; 121:4, s. 1500-1532
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Tidskriftsartikel (refereegranskat)abstract
- In this paper, we analyze how international capital mobility affects the optimal labor and capital income tax policy in a small open economy when consumers care about relative consumption. The main results crucially depend on whether the government can tax returns on savings abroad. If the government can use flexible residence-based capital income taxes, then the optimal policy rules from a closed economy largely carry over to the case of a small open economy. If it cannot, then capital income taxes become completely ineffective. The labor income taxes must then indirectly also reflect the corrective purpose that the absent capital income tax would have had.
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| 48. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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State-variable public goods and social comparisons
- 2014
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Ingår i: Journal of Environmental Economics and Management. - : Elsevier. - 0095-0696 .- 1096-0449. ; 68:2, s. 390-410
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Tidskriftsartikel (refereegranskat)abstract
- The optimal provision of a state-variable public good, where the global climate is the prime example, is analyzed in a model where people care about their relative consumption. We consider both keeping-up-with-the-Joneses preferences (where people compare their own current consumption with others’ current consumption) and catching-up-with-the-Joneses preferences (where people compare their own current consumption with others’ past consumption) in an economy with two productivity types, overlapping generations, and optimal nonlinear income taxation. The extent to which the conventional rules for provision of state-variable public goods (a dynamic analog of the Samuelson rules) ought to be modified is shown to clearly depend on the strength of the relative concerns of both kinds, but also on the preference elicitation format.
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| 49. |
- Aronsson, Thomas, et al.
(författare)
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State-Variable Public Goods and Social Comparisons over Time
- 2013
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- The optimal provision of a state-variable public good, where the global climate is the prime example, is analyzed in a model where people care about their relative consumption. We consider both keeping-up-with-the-Joneses preferences (where people compare their own current consumption with others’ current consumption) and catching-up-with-the-Joneses preferences (where people compare their own current consumption with others’ past consumption) in an economy with two productivity types, overlapping generations and optimal nonlinear income taxation. The extent to which the conventional rules for public provision ought to be modified is shown to depend on the strength of such relative concerns, but also on the preference elicitation format.
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| 50. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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Veblen’s theory of the leisure class revisited : Implications for optimal income taxation
- 2010
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- Almost all previous studies on public policy under relative consumption concerns have ignored the role of leisure for status comparisons. Inspired by Veblen (1899), this paper considers a two-type optimal income tax model, where people care about their relative consumption, and where the importance of relative consumption increases with the use of leisure due to increased consumption visibility. We show that increased consumption positionality typically implies higher marginal income tax rates for both ability-types. Using a leisure-weighted measure of reference consumption, rather than a measure where leisure plays no role as in the previous literature, increases the marginal income tax rate implemented for the low-ability type and decreases the marginal income tax rate implemented for the high-ability type, i.e., it gives rise to a regressive tax component.
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