Estimating the Social Marginal Cost of Public Funds: A Microdata Approach

Shun ichiro Bessho, Masayoshi Hayashi

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

In this study, we recast the formula of the social marginal cost of public funds (SMCF) and highlight the role of what we call individual marginal costs of public funds (IMCF). After elaborating on aspects of distributional weights, we estimate the wage elasticity of labor supply and the IMCFs on a household basis. This allows us to explore not only the distributions of the elasticity and the IMCFs but also their relations to household income, which helps us assess the assumptions made in previous studies. Further, we use the SMCF estimates to evaluate the system of personal income taxes in Japan.

Original languageEnglish
Pages (from-to)360-385
Number of pages26
JournalPublic Finance Review
Volume41
Issue number3
DOIs
Publication statusPublished - 2013 May

Fingerprint

marginal costs
social costs
labor supply
income tax
household income
wage
Japan
Micro data
Marginal cost of public funds

Keywords

  • distributional w.
  • Japan
  • progressive t.
  • social marginal cost of public funds

ASJC Scopus subject areas

  • Finance
  • Public Administration
  • Economics and Econometrics

Cite this

Estimating the Social Marginal Cost of Public Funds : A Microdata Approach. / Bessho, Shun ichiro; Hayashi, Masayoshi.

In: Public Finance Review, Vol. 41, No. 3, 05.2013, p. 360-385.

Research output: Contribution to journalArticle

Bessho, Shun ichiro ; Hayashi, Masayoshi. / Estimating the Social Marginal Cost of Public Funds : A Microdata Approach. In: Public Finance Review. 2013 ; Vol. 41, No. 3. pp. 360-385.
@article{66729343d6a64400bae2537a78027c7c,
title = "Estimating the Social Marginal Cost of Public Funds: A Microdata Approach",
abstract = "In this study, we recast the formula of the social marginal cost of public funds (SMCF) and highlight the role of what we call individual marginal costs of public funds (IMCF). After elaborating on aspects of distributional weights, we estimate the wage elasticity of labor supply and the IMCFs on a household basis. This allows us to explore not only the distributions of the elasticity and the IMCFs but also their relations to household income, which helps us assess the assumptions made in previous studies. Further, we use the SMCF estimates to evaluate the system of personal income taxes in Japan.",
keywords = "distributional w., Japan, progressive t., social marginal cost of public funds",
author = "Bessho, {Shun ichiro} and Masayoshi Hayashi",
year = "2013",
month = "5",
doi = "10.1177/1091142113475699",
language = "English",
volume = "41",
pages = "360--385",
journal = "Public Finance Review",
issn = "1091-1421",
publisher = "SAGE Publications Inc.",
number = "3",

}

TY - JOUR

T1 - Estimating the Social Marginal Cost of Public Funds

T2 - A Microdata Approach

AU - Bessho, Shun ichiro

AU - Hayashi, Masayoshi

PY - 2013/5

Y1 - 2013/5

N2 - In this study, we recast the formula of the social marginal cost of public funds (SMCF) and highlight the role of what we call individual marginal costs of public funds (IMCF). After elaborating on aspects of distributional weights, we estimate the wage elasticity of labor supply and the IMCFs on a household basis. This allows us to explore not only the distributions of the elasticity and the IMCFs but also their relations to household income, which helps us assess the assumptions made in previous studies. Further, we use the SMCF estimates to evaluate the system of personal income taxes in Japan.

AB - In this study, we recast the formula of the social marginal cost of public funds (SMCF) and highlight the role of what we call individual marginal costs of public funds (IMCF). After elaborating on aspects of distributional weights, we estimate the wage elasticity of labor supply and the IMCFs on a household basis. This allows us to explore not only the distributions of the elasticity and the IMCFs but also their relations to household income, which helps us assess the assumptions made in previous studies. Further, we use the SMCF estimates to evaluate the system of personal income taxes in Japan.

KW - distributional w.

KW - Japan

KW - progressive t.

KW - social marginal cost of public funds

UR - http://www.scopus.com/inward/record.url?scp=84876243447&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84876243447&partnerID=8YFLogxK

U2 - 10.1177/1091142113475699

DO - 10.1177/1091142113475699

M3 - Article

AN - SCOPUS:84876243447

VL - 41

SP - 360

EP - 385

JO - Public Finance Review

JF - Public Finance Review

SN - 1091-1421

IS - 3

ER -