Balanced-budget consumption taxes and aggregate stability in a small open economy

In a small open economy facing a perfect world capital market, this paper shows that if the government follows a balanced-budget fiscal policy based on endogenous consumption tax rates, then the steady state is saddle-path stable and hence beliefs-driven aggregate instability can be ruled out. This result is in contrast to those obtained in some closed economy models, and it suggests that unrestricted world capital mobility can help stabilize the economy under the balanced-budget fiscal policy based on consumption taxation.

Capital and Consumption Tax Reforms in a Small Open Economy

The effects of a reform in capital and consumption taxes on private welfare and government tax revenue are examined for a small open, capital-importing economy. A trade-off between private welfare and tax revenue is encountered in maximizing social welfare. Nonetheless, lowering capital taxes and raising consumption taxes can increase both private welfare and tax revenue if the initial tax rates are not optimal. In addition, a tax reform by this fashion is a likely response to a rise in the foreign rate of return on capital.

Tariff and consumption tax reforms in a developing tourism economy

This paper examines the effects of a coordinated tax reform by replacing import tariffs with point-by-point increases in consumption taxes for a small-open developing tourism economy. Foreign tourists demand for the non-traded goods provided in the informal sector of the host economy, resulting in a tourism-induced terms-of-trade effect. The presence of inbound tourism lends a support to positive tariffs even for a small open economy. The indirect tax reform of this kind can increase residents’ welfare and government revenue when the initial tariffs are relatively larger to the consumption taxes.

Exempt treatment of financial intermediation services under a value-added tax: an assessment of alternatives

Most countries with a value-added tax (VAT) exempt financial intermediation services from the tax. While exemption is generally perceived to be undesirable, it is also widely regarded as unavoidable because of technical difficulties in applying VAT to these services. This article reviews the standard rationale for exempt treatment and then considers the relative merits of two recent challenges raised in the tax literature. The first challenge involves the application of cash flow taxation to financial intermediation services in a manner that is consistent with an invoice/credit VAT (which is the dominant form). The second challenge proposes a comprehensive system of zero-rating of financial intermediation services, which is supported by a characterization of the household consumption of such services as non-taxable. The author argues that each of these alternatives to an exemption system suffers from both theoretical and practical implementation difficulties that make maintenance of exempt treatment the preferred approach, at least in the short term. There is, however, a simpler alternative to these fundamental reform options, involving modification of just one aspect of an exemption system to relieve some of its more problematic aspects. Many of the interpretative problems and associated inefficiencies that plague an exemption system arise from the need to distinguish between taxable and exempt financial services. The author argues that these difficulties can be eliminated, to a large extent, by basing the distinction on the form of prices. In support of this approach, he points out that it is consistent with the underlying reasons for the application of exempt treatment. The author considers a number of other possible modifications, but these are either rejected outright or viewed with a healthy skepticism. For example, the author is critical of the apparent rationale for the application of cash flow taxation to property and casualty insurers. He also rejects proposals that accept some looseness in the formulaic allocation by financial intermediaries of the costs of business inputs between exempt and taxable services for input credit purposes. In his view, an explicit reliance on pricing structures to draw the boundary between exempt and taxable services is preferable to the provision of relief for blocked input tax credits of financial intermediaries. Finally, the author is skeptical of the case for a policy response intended to address the tax bias under an exemption system for financial intermediaries to insource supplies.

Should we refinance unfunded social security?

Within a continuous-time overlapping generations model, featuring endogenous intensive margin of the labour supply and retirement decision, we analyse the issue of passing the burden of payroll revenues onto consumption or capital. We find that large long-run welfare gains occur when pension benefits are refinanced by consumption taxes. However, the transition to the new steady state is very painful for a large fraction of existing cohorts. On the other hand, the capital base is too small to sustain pension benefits but could be made larger if capital taxes are raised. Yet that would entail significant welfare losses.

Modelling income group differences in the health and economic impacts of targeted food taxes and subsidies

Objective : To examine the effects, by income group, of targeted food taxes and subsidies on nutrition, health and expenditure in the UK.

Methods : A model based on consumption data and demand elasticity was constructed to predict the effects of four food taxation-subsidy regimens. Resulting changes in demand, expenditure, nutrition, cardiovascular disease (CVD) and cancer mortality were estimated.

Data : Expenditure data were taken from the Expenditure and Food Survey; estimates of price elasticities of demand for food were taken from a report based on the National Food Survey 1988–2000. Estimates of effect on CVD and cancer mortality of changing fat, salt, fruit and vegetable intake were taken from previous meta-analyses.

Results : (i) Taxing principal sources of dietary saturated fat is unlikely to reduce cardiovascular disease (CVD) or cancer mortality. (ii) Taxing ‘less healthy’ foods (defined by the WXYfm nutrient profiling model) could increase CVD and cancer deaths by 35–1300 yearly. (iii) Taxing ‘less healthy’ foods and subsidising fruits and vegetables by 17.5% could avert up to 2900 CVD and cancer deaths yearly. (iv) Taxing ‘less healthy’ foods and using all tax revenue to subsidize fruits and vegetables could avert up to 6400 CVD and cancer deaths yearly. Few obesity-related CVD deaths are averted by any of the regimens. All four regimens would be economically regressive and positive health effects will not necessarily be greater in lower-income groups where the need for dietary improvement is higher.

Conclusions : A targeted food tax combined with the appropriate subsidy on fruits and vegetables could reduce deaths from CVD and cancer.

Optimal tax mix with merit goods

This paper deals with optimal taxation in a two‐class economy with two private commodities and labour. We derive optimal non‐linear income and linear commodity taxes in the presence of merit goods. We formulate merit good arguments via a pathology of individual choice. We assume weak separability between consumption and leisure and show how the standard optimal tax results are modified due to merit good considerations.

Nutrition knowledge and food consumption: can nutrition knowledge change food behaviour?

The status and explanatory role of nutrition knowledge is uncertain in public health nutrition. Much of the uncertainty about this area has been generated by conceptual confusion about the nature of knowledge and behaviours, and, nutrition knowledge and food behaviours in particular. So the paper  describes several key concepts in some detail. The main argument is that 'nutrition knowledge' is a necessary but not sufficient factor for changes in consumers' food behaviours. Several classes of food behaviours and their causation are discussed. They are influenced by a number of environmental and intra-individual factors, including motivations. The interplay between motivational factors and information processing is important for nutrition promoters as is the distinction between declarative and procedural  knowledge. Consideration of the domains of nutrition knowledge shows that their utility is likely to be related to consumers' and nutritionists' particular goals and viewpoints. A brief survey of the recent literature shows that the evidence for the influence of nutrition knowledge on food behaviours is mixed. Nevertheless, recent work suggests that nutrition knowledge may play a small but pivotal role in the adoption of healthier food habits. The implications of this overview for public health nutrition are: (i) We need to pay greater attention to the development of children's and adults' knowledge frameworks (schema building); (ii) There is a need for a renewed proactive role for the education sector; (iii) We need to take account of consumers' personal food goals and their acquisition of procedural knowledge which will enable them to attain their goals; (iv) Finally, much more research into the ways people learn and use food-related knowledge is required in the form of experimental interventions and longitudinal studies.

Benefits and barriers to the consumption of a vegetarian diet in Australia

Objective: The aim of this study was to examine consumers' perceived benefits and barriers to the consumption of a vegetarian diet.

Design: Survey (written questionnaire) that included questions on perceived benefits and barriers to the consumption of a vegetarian diet.

Setting: South Australia.

Subjects: Six hundred and one randomly selected South Australians.

Results: The main perceived barriers to adopting a vegetarian diet were enjoying eating meat and an unwillingness to alter eating habits. This was the case for men, women and all age groups, although there were sex and age differences present in over half of the barrier items. For example, family food preferences were a greater problem for women than for men, while the oldest group was more likely to agree that humans are ‘meant’ to eat meat than the younger groups. The main benefits associated with vegetarian diets were health benefits: increased fruit and vegetable intake, decreased saturated fat intake, weight control. Animal welfare-related benefits and disease prevention were also important. Age and sex differences were apparent, although age differences were more important than sex differences.

Conclusions: The majority of respondents perceived there to be health benefits associated with the consumption of a vegetarian diet, but also, predictably, enjoyed eating meat. Given this, it is likely that interest in plant-based diets that contain some meat is higher than that in no-meat diets. An understanding of the perceived benefits and barriers of consuming a vegetarian diet will allow the implementation of strategies to influence meat and vegetarianism beliefs, dietary behaviour and, hence, public health.

Effect of yarn hairiness on energy consumption in rotating a ring-spun yarn package

The effect of yarn hairiness on energy consumption when rotating a ring-spun yarn package is investigated theoretically and experimentally. A theoretical model is developed to calculate the energy required to rotate hair fibers, based on hair length and number as well as package speed and size. A single spindle test rig is used to verify the theoretical prediction. The experimental results confirm the theoretical prediction that the package power increases with increased yarn hairiness level and spindle speed.

Tourism, taxes and immiserization: A trade theoretic analysis

Many countries promote tourism as a device for earning foreign exchange and promoting domestic welfare and growth. In all these countries the non-traded goods (internationally not traded) are consumed by both domestic residents and tourists. It is well known that the relative price of non-traded goods and services is determined in the local market – hence the tourist demand results in monopoly power in trade for the host country. We use a very simple two-country model to demonstrate the specific nature of the offer curve and the trade equilibrium and the difficulties of taxation.

The behavioural and demographic contexts of white bread consumption

The aim of this study was to examine the demographic, health habits and personal values associations of white bread use. A total of 474 randomly selected consumers completed a questionnaire about bread consumption, health habits and personal values. The findings showed that compared with non-consumers white bread users were younger, less educated, more likely to have children and to be smokers. They were less likely to follow vegetarian, low fat or special diets or use alternative therapies. Non-consumers were more likely to hold pro-nature universalistic values. This suggests that the use of this staple food is associated with demographic, behavioural and ideological domains. Their causal inter-relationships require further investigation.

Income differences in food consumption in the 1995 Australian national nutrition survey

Objective: To assess the relationships between an index of per capita income and the intake of a variety of individual foods as well as groups of food for men and women in different age groups. Design: Cross-sectional national survey of free-living men and women. Subjects: A sample of 5053 males and 5701 females aged 18 y and over who completed the Australian National Nutrition Survey 1995. Methods: Information about the frequency of consumption of 88 food items was obtained. On the basis of scores on the Food Frequency Questionnaire, regular and irregular consumers of single foods were identified. The relationships between regularity of consumption of individual foods and per capita income were analysed via contingency tables. Food variety scores were derived by assigning individual foods to conventional food group taxonomies, and then summing up the dichotomised intake scores for individual foods within each food group. Two-way ANOVA (income age group) were performed on the food variety scores for males and females, respectively. Results: Per capita income was extensively related to the reported consumption of individual foods and to total and food group variety indices. Generally, both men and women in low income households had less varied diets than those in higher-income households. However, several traditional foods were consumed less often by young high-income respondents, especially young women. Conclusions: Major income differentials in food variety occur in Australia but they are moderated by age and gender. Younger high-income women, in particular, appear to have rejected a number of traditional foods, possibly on the basis of health beliefs. The findings also suggest that data aggregation has marked effects on income and food consumption relationships.

Minimizing energy consumption of yarn winding in ring spinning

Ring spinning has been and will continue to be an important system for making staple yarns from different fibers in the textile industry. But high power consumption and low productivity remain the two outstanding problems with ring spinning. Based on an analysis of power distribution during yarn winding in ring spinning, models for the ratio of energy consumption to yarn production over a full yarn package are established. Spindle speed, yarn count, and package diameter are the three key parameters affecting this ratio. The effects on energy consumption of these parameters are discussed through a case study. The energy-to-production ratio increases with increased package diameter but decreases with increased spindle speed and/or yarn count (tex). The results will help guide spinners in minimizing energy consumption in ring spinning.