Public good provision and the welfare effects of indirect tax harmonisation

The paper considers the welfare effect of the harmonisation of indirect taxes in two open economies. The revenue from taxation is used for the production of a non-tradeable public good. The welfare levels are affected via two channels: (i) changes in the levels of public good provision, and (ii) changes in deadweight loss associated with the taxes. We develop a number of rules of harmonisation and derive conditions under which they lead to potential Pareto improvement.

A normative approach to the criminalisation of cartel activity

Although cartel behaviour is almost universally (and rightly) condemned, it is not clear why cartel participants deserve the full wrath of the criminal law and its associated punishment. To fill this void, I develop a normative (or principled) justification for the criminalisation of conduct characteristic of ‘hard core’ cartels. The paper opens with a brief consideration of the rhetoric commonly used to denounce cartel activity, eg that it ‘steals from’ or ‘robs’ consumers. To put the discussion in context, a brief definition of ‘hard core’ cartel behaviour is provided and the harms associated with this activity are identified. These are: welfare losses in the form of appropriation (from consumer to producer) of consumer surplus, the creation of deadweight loss to the economy, the creation of productive inefficiency (hindering innovation of both products and processes), and the creation of so-called X-inefficiency. As not all activities which cause harm ought to be criminalised, a theory as to why certain harms in a liberal society can be criminalised is developed. It is based on JS Mill's harm to others principle (as refined by Feinberg) and on a choice of social institutions using Rawls's ‘veil of ignorance.’ The theory is centred on the value of individual choice in securing one's own well-being, with the market as an indispensable instrument for this. But as applied to the harm associated with cartel conduct, this theory shows that none of the earlier mentioned problems associated with this activity provide sufficient justification for criminalisation. However, as the harm from hard core cartel activity strikes at an important institution which permits an individual's ability to secure their own well-being in a liberal society, criminalisation of hard core cartel behaviour can have its normative justification on this basis.

Price Discrimination in Quantity Setting Oligopoly

We analyze a two-stage quantity setting oligopolistic price discrimination game. In the first stage firms choose capacities and in the second stage they simultaneously choose the share that they assign to each segment. At the equilibrium the firms focus more on the high-valuation customers. When the capacities in the first stage are endogenous, the deadweight loss does not vanish with the level of price discrimination, as it does in one-stage games and monopoly. Moreover, the quantity-weighted average price increases with the level of price discrimination as opposed to established results in the literature for one-stage games.

O Papel da elasticidade da renda tributável na avaliação do custo de eficiência da tributação

O trabalho utiliza conceitos da economia do bem estar e a elasticidade da renda tributável para analisar o custo social das reações comportamentais dos contribuintes do imposto de renda sobre as pessoas físicas no Brasil, em resposta a uma mudança de política tributária. A elasticidade da renda tributável despertou grande atenção recente, motivada pela perspectiva de estimar em conjunto todas as reações comportamentais a uma mudança no sistema tributário através de um único parâmetro, mensurando custos de eficiência e de bem estar suportados pela economia de forma relativamente simples. O trabalho aborda a utilização de medidas de variação de bem estar para avaliar mudanças na política tributária e faz uma resenha da literatura sobre a elasticidade da renda tributável, conceitos, características, vantagens e limitações. Um modelo de preferências é especificado para exemplificar a dimensão das reações à tributação e os custos de eficiência envolvidos, e discutir a viabilidade do emprego da elasticidade da renda tributável como parâmetro estrutural.

A Natural Gas Severance Tax-An Economic Analysis

This study estimates the economic effects of a severance tax on the market for natural gas produced from shale sources using non-conventional extraction methods, such as horizontal drilling and fracking. Results suggest that a severance tax of 5% would increase the price of natural gas by as much as 3.82% and decrease gas extraction by an estimated 1.16% to a value of 9.52%. If applied to the Commonwealth of Pennsylvania in the United States, a 5% severance tax is estimated to raise between US$443 and $486 million per year in public revenue. The marginal deadweight loss associated with a 5% severance tax is estimated between 1.27% and 12.85% of the last dollar earned. The burden of this tax falls on both producers and consumers and depends upon the underlying assumptions made regarding the price responsiveness of consumers and producers. Under plausible assumptions, a family consuming 1000 MMcfs (approximate to 2.8 x 10(4) m(3)) per year of natural gas is estimated to pay an additional $100 per year after the implementation of a 5% severance tax.

The effects of excise tax changes on alcoholic beverages and tobacco consumption in Thailand

The purpose of this thesis is to examine the factors affecting the likelihood of consumption and the amount spent on alcoholic beverages and tobacco in Thailand using the 2009 Socio-Economic Survey of Thailand. Results suggest that household size, tenure and occupation have significant impacts on both the probability of alcohol and tobacco consumption and spending levels. Income also plays a key role in explaining the amount spent on alcoholic beverages and tobacco. Demand elasticities are calculated under the Extended Linear Expenditure System (ELES). Demand for alcoholic beverages and tobacco is found to be inelastic. The effects of increasing taxation on alcohol and tobacco consumption in Thailand are estimated. The findings are that excise taxes in Thailand are efficient taxes with only a modest rise in deadweight loss. Taxes result in a small decrease in consumption but generate higher expenditure and government tax revenue. Excise tax on alcoholic beverages results in a net benefit to the Thai economy. Tobacco taxes increase total expenditure and government revenue as well as increasing net benefit to the Thai economy. However, the low elasticities of demand also mean that excise taxes have only a small impact on reducing the costs associated with drinking and smoking.

Does psychological stress mediate social deprivation in tooth loss?

It is unclear which theoretical dimension of psychological stress affects health status. We hypothesized that both distress and coping mediate the relationship between socio-economic position and tooth loss. Cross-sectional data from 2915 middle-aged adults evaluated retention of < 20 teeth, behaviors, psychological stress, and sociodemographic characteristics. Principal components analysis of the Perceived Stress Scale (PSS) extracted 'distress' (a = 0.85) and 'coping' (a =0.83) factors, consistent with theory. Hierarchical entry of explanatory variables into age- and sex-adjusted logistic regression models estimated odds ratios (OR) and 95% confidence intervals [95% CI] for retention of < 20 teeth. Analysis of the separate contributions of distress and coping revealed a significant main effect of coping (OR = 0.7 [95% CI = 0.7-0.8]), but no effect for distress (OR = 1.0 [95% CI = 0.9-1.1]) or for the interaction of coping and distress. Behavior and psychological stress only modestly attenuated socio-economic inequality in retention of < 20 teeth, providing evidence to support a mediating role of coping.

Beyond Bryan: Builders' liability and pure economic loss

In Bryan v Maloney, the High Court extended a builder’s duty of care to encompass a liability in negligence for the pure economic loss sustained by a subsequent purchaser of a residential dwelling as a result of latent defects in the building’s construction. Recently, in Woolcock Street Investments Pty Ltd v CDG Pty Ltd, the Court refused to extend this liability to defects in commercial premises. The decision therefore provides an opportunity to re-examine the rationale and policy behind current jurisprudence governing builders’ liability for pure economic loss. In doing so, this article considers the principles relevant to the determination of a duty of care generally and whether the differences between purchasers of residential and commercial properties are as great as the case law suggests

Optimal allocation and sizing of capacitors to minimize the transmission line loss and to improve the voltage profile

To allocate and size capacitors in a distribution system, an optimization algorithm, called Discrete Particle Swarm Optimization (DPSO), is employed in this paper. The objective is to minimize the transmission line loss cost plus capacitors cost. During the optimization procedure, the bus voltage, the feeder current and the reactive power flowing back to the source side should be maintained within standard levels. To validate the proposed method, the semi-urban distribution system that is connected to bus 2 of the Roy Billinton Test System (RBTS) is used. This 37-bus distribution system has 22 loads being located in the secondary side of a distribution substation (33/11 kV). Reducing the transmission line loss in a standard system, in which the transmission line loss consists of only about 6.6 percent of total power, the capabilities of the proposed technique are seen to be validated.

Exercise alone is not enough : weight loss also needs a healthy (Mediterranean) diet?

Objective: In the majority of exercise intervention studies, the aggregate reported weight loss is often small. The efficacy of exercise as a weight loss tool remains in question. The aim of the present study was to investigate the variability in appetite and body weight when participants engaged in a supervised and monitored exercise programme. ---------- Design: Fifty-eight obese men and women (BMI = 31·8 ± 4·5 kg/m2) were prescribed exercise to expend approximately 2092 kJ (500 kcal) per session, five times a week at an intensity of 70 % maximum heart rate for 12 weeks under supervised conditions in the research unit. Body weight and composition, total daily energy intake and various health markers were measured at weeks 0, 4, 8 and 12. ---------- Results: Mean reduction in body weight (3·2 ± 1·98 kg) was significant (P < 0·001); however, there was large individual variability (−14·7 to +2·7 kg). This large variability could be largely attributed to the differences in energy intake over the 12-week intervention. Those participants who failed to lose meaningful weight increased their food intake and reduced intake of fruits and vegetables. ---------- Conclusion: These data have demonstrated that even when exercise energy expenditure is high, a healthy diet is still required for weight loss to occur in many people.

Tesofensine : a novel potent weight loss medicine

Background: The incidence of obesity is increasing; this is of major concern, as obesity is associated with cardiovascular disease, stroke, type 2 diabetes, respiratory tract disease, and cancer. Objectives/methods: This evaluation is of a Phase II clinical trial with tesofensine in obese subjects. Results: After 26 weeks, tesofensine caused a significant weight loss, and may have a higher maximal ability to reduce weight than the presently available anti-obesity agents. However, tesofensine also increased blood pressure and heart rate, and may increase psychiatric disorders. Conclusions: It is encouraging that tesofensine 0.5 mg may cause almost double the weight loss observed with sibutramine or rimonabant. As tesofensine and sibutramine have similar pharmacological profiles, it would be of interest to compare the weight loss with tesofensine in a head-to-head clinical trial with sibutramine, to properly assess their comparative potency. Also, as teso fensine 0.5 mg increases heart rate, as well as increasing the incidence of adverse effects such as nausea, drug mouth, flatulence, insomnia, and depressed mode, its tolerability needs to be further evaluated in large Phase III clinical trials.

Foreseeability of pure economic loss and causation

In Bonny Glen Pty Ltd v Country Energy [2009] NSWCA 26 (24 February 2009) the New South Wales Court of Appeal held that the pure economic loss suffered by the appellant was recoverable. However, rather than arguments as to whether the appellant was vulnerable and a member of an ascertainable class, whether the respondent had knowledge of the risk to the appellant and was in a position of control and considerations as to indeterminate liability as in Perre v Apand Pty Ltd (1999) 198 CLR 180, the arguments raised related to the foreseeability of the loss and causation.