Podcast
Questions and Answers
What is a common limitation of traditional theoretical models in economics?
What is a common limitation of traditional theoretical models in economics?
- They rely on well-identified empirical estimators
- They often provide strong predictions that are difficult to test empirically
- They make weak predictions that are not always accurate (correct)
- They implement numerical simulations with no assumptions
Which approach relies on robust formulas that can be implemented using empirical estimators like difference-in-differences and IV?
Which approach relies on robust formulas that can be implemented using empirical estimators like difference-in-differences and IV?
- Recent work in economics (correct)
- Traditional theoretical models
- Numerical simulations
- Behavioral economics
What technique is NOT mentioned as one of the empirical estimators used in the recent work mentioned in the text?
What technique is NOT mentioned as one of the empirical estimators used in the recent work mentioned in the text?
- Regression discontinuity
- Difference-in-differences
- Difference-in-similarities (correct)
- Instrumental variables (IV)
What course is specifically recommended for students interested in the approaches mentioned in the text?
What course is specifically recommended for students interested in the approaches mentioned in the text?
What is a significant advantage of recent work that connects theory to data, as mentioned in the text?
What is a significant advantage of recent work that connects theory to data, as mentioned in the text?
What is the primary benefit of Big Data discussed in the text?
What is the primary benefit of Big Data discussed in the text?
How has the recent availability of very large datasets impacted research in applied microeconomics?
How has the recent availability of very large datasets impacted research in applied microeconomics?
In the context of behavioral economics, what does 'eliciting the people’s view' refer to?
In the context of behavioral economics, what does 'eliciting the people’s view' refer to?
What is a key aspect of behavioral public economics as discussed in the text?
What is a key aspect of behavioral public economics as discussed in the text?
How does Big Data enable researchers to connect theory to data effectively?
How does Big Data enable researchers to connect theory to data effectively?
What does the text suggest about responses that appear consistent with optimization in the aggregate?
What does the text suggest about responses that appear consistent with optimization in the aggregate?
How successful are standard policy tools suggested by neoclassical theory in increasing savings rates?
How successful are standard policy tools suggested by neoclassical theory in increasing savings rates?
What is the focus of the new strand of research mentioned in the text that uses large-scale online surveys and experiments?
What is the focus of the new strand of research mentioned in the text that uses large-scale online surveys and experiments?
Which study is mentioned in the text as an example of the research using large-scale online surveys and experiments?
Which study is mentioned in the text as an example of the research using large-scale online surveys and experiments?
What does the research by Ferrario & Stantcheva (2022) focus on?
What does the research by Ferrario & Stantcheva (2022) focus on?
What is one of the ways behavioral economics influences public policy according to the text?
What is one of the ways behavioral economics influences public policy according to the text?
How can behavioral features like inertia and inattention improve predictions about policy effects?
How can behavioral features like inertia and inattention improve predictions about policy effects?
In the context of behavioral public economics, what is the relationship between decision utility and experienced utility?
In the context of behavioral public economics, what is the relationship between decision utility and experienced utility?
How does the pragmatic approach to behavioral public economics differ from the neoclassical model?
How does the pragmatic approach to behavioral public economics differ from the neoclassical model?
What was one specific tax-related change discussed in the text as an example of behavioral public economics?
What was one specific tax-related change discussed in the text as an example of behavioral public economics?
What is the main goal of the unsupervised clustering machine learning algorithm used in the study?
What is the main goal of the unsupervised clustering machine learning algorithm used in the study?
In the context of the study, what factors contribute to the income tax policy index?
In the context of the study, what factors contribute to the income tax policy index?
What aspect of tax policy does the study emphasize in relation to respondents' views?
What aspect of tax policy does the study emphasize in relation to respondents' views?
How are respondents grouped based on the latent Dirichlet allocation algorithm?
How are respondents grouped based on the latent Dirichlet allocation algorithm?
What is the underlying goal of constructing the policy index in the study?
What is the underlying goal of constructing the policy index in the study?
What is the primary focus of normative analysis in public economics?
What is the primary focus of normative analysis in public economics?
In the context of public economics, what is the key role of positive analysis?
In the context of public economics, what is the key role of positive analysis?
How does modern public economics integrate theory with empirical evidence?
How does modern public economics integrate theory with empirical evidence?
What is a key skill set required for applied public economics according to the text?
What is a key skill set required for applied public economics according to the text?
What characterizes the methodology of public economics in the current context?
What characterizes the methodology of public economics in the current context?
What is one of the elements included in the survey background socioeconomic questions?
What is one of the elements included in the survey background socioeconomic questions?
In the survey, how do respondents classify themselves in terms of their views on economic policy?
In the survey, how do respondents classify themselves in terms of their views on economic policy?
What kind of information was provided to a randomly chosen subsample of respondents in the survey?
What kind of information was provided to a randomly chosen subsample of respondents in the survey?
What do respondents in the survey reason about in more detail?
What do respondents in the survey reason about in more detail?
What are respondents asked to consider regarding tax policy in the survey?
What are respondents asked to consider regarding tax policy in the survey?
What is one of the knowledge areas that respondents are tested on in the survey?
What is one of the knowledge areas that respondents are tested on in the survey?
What do respondents consider when evaluating the distributional consequences for different groups in the survey?
What do respondents consider when evaluating the distributional consequences for different groups in the survey?
'Connecting Theory to Data' refers to what aspect in the context of behavioral public economics?
'Connecting Theory to Data' refers to what aspect in the context of behavioral public economics?
'Data-driven approach' in behavioral public economics emphasizes what core principle?
'Data-driven approach' in behavioral public economics emphasizes what core principle?
'Role of the Government' in behavioral public economics focuses on what aspect?
'Role of the Government' in behavioral public economics focuses on what aspect?
What is the average percentage of National Income collected in taxes by governments in advanced economies?
What is the average percentage of National Income collected in taxes by governments in advanced economies?
What are the two main areas funded by taxes in advanced economies?
What are the two main areas funded by taxes in advanced economies?
Why do humans reveal their social nature according to the text?
Why do humans reveal their social nature according to the text?
What are the three main questions posed in the introduction of the text?
What are the three main questions posed in the introduction of the text?
What are social interactions critical for according to the text?
What are social interactions critical for according to the text?
What is the focus of the study of Public Economics according to the text?
What is the focus of the study of Public Economics according to the text?
What does the text suggest about replacing social institutions with markets?
What does the text suggest about replacing social institutions with markets?
What limits the full understanding of public economics according to the text?
What limits the full understanding of public economics according to the text?
What are the direct effects of government interventions?
What are the direct effects of government interventions?
What are the indirect effects of government interventions?
What are the indirect effects of government interventions?
What is the 2nd Welfare Theorem about?
What is the 2nd Welfare Theorem about?
What is the role of Political Economy in government interventions?
What is the role of Political Economy in government interventions?
Explain the concept of Public Choice in the context of government interventions.
Explain the concept of Public Choice in the context of government interventions.
What is the equity-efficiency trade-off created by redistribution?
What is the equity-efficiency trade-off created by redistribution?
How do governments intervene to address individual failures?
How do governments intervene to address individual failures?
Why do governments estimate indirect effects of interventions?
Why do governments estimate indirect effects of interventions?
What is a key finding from the analysis mentioned in the text?
What is a key finding from the analysis mentioned in the text?
What is the main challenge faced by standard policy tools according to the text?
What is the main challenge faced by standard policy tools according to the text?
What is the focus of the new strand of research using large-scale online surveys and experiments?
What is the focus of the new strand of research using large-scale online surveys and experiments?
Which study is mentioned as an example of research using large-scale online surveys and experiments in the text?
Which study is mentioned as an example of research using large-scale online surveys and experiments in the text?
What is a key aspect of behavioral public economics as discussed in the text?
What is a key aspect of behavioral public economics as discussed in the text?
What do large-scale online surveys and experiments aim to uncover?
What do large-scale online surveys and experiments aim to uncover?
How do responses that appear to be consistent with optimization at the aggregate level differ at the individual level?
How do responses that appear to be consistent with optimization at the aggregate level differ at the individual level?
What is a common limitation of standard policy tools suggested by neoclassical theory?
What is a common limitation of standard policy tools suggested by neoclassical theory?
What are the three domains in which the implications of behavioral economics for public policy can be classified?
What are the three domains in which the implications of behavioral economics for public policy can be classified?
What are the two types of tax-deferred savings accounts in Denmark discussed in the example by Chetty et al. (2014)?
What are the two types of tax-deferred savings accounts in Denmark discussed in the example by Chetty et al. (2014)?
What was the specific tax deduction change made in 1999 for individuals in the top income tax bracket in Denmark, as mentioned in the text?
What was the specific tax deduction change made in 1999 for individuals in the top income tax bracket in Denmark, as mentioned in the text?
In what year was the tax deduction for contributing to capital pension accounts reduced for individuals in the top income tax bracket in Denmark?
In what year was the tax deduction for contributing to capital pension accounts reduced for individuals in the top income tax bracket in Denmark?
What is the concept that accounts for the gap between welfare from a policy maker’s perspective and the agent’s decision utility in behavioral economics?
What is the concept that accounts for the gap between welfare from a policy maker’s perspective and the agent’s decision utility in behavioral economics?
What is the term used to describe the objective that an agent maximizes when making choices in behavioral economics?
What is the term used to describe the objective that an agent maximizes when making choices in behavioral economics?
What approach in public economics focuses on a policy question and integrates behavioral factors to enhance empirical predictions and policy decisions?
What approach in public economics focuses on a policy question and integrates behavioral factors to enhance empirical predictions and policy decisions?
What is the benchmark for most economic applications despite the incorporation of insights from psychology into economic models?
What is the benchmark for most economic applications despite the incorporation of insights from psychology into economic models?
What is the debate about behavioral economics often framed as, questioning the foundational assumptions of neoclassical economics?
What is the debate about behavioral economics often framed as, questioning the foundational assumptions of neoclassical economics?
What are some of the elements included in the survey background socioeconomic questions?
What are some of the elements included in the survey background socioeconomic questions?
How do respondents classify themselves in terms of their views on economic policy in the survey?
How do respondents classify themselves in terms of their views on economic policy in the survey?
What kind of information was provided to a randomly chosen subsample of respondents in the survey?
What kind of information was provided to a randomly chosen subsample of respondents in the survey?
What are some of the knowledge areas that respondents are tested on in the survey?
What are some of the knowledge areas that respondents are tested on in the survey?
What do respondents reason about in more detail in the survey?
What do respondents reason about in more detail in the survey?
What is the key role of positive analysis in public economics?
What is the key role of positive analysis in public economics?
What is the relationship between decision utility and experienced utility in behavioral public economics?
What is the relationship between decision utility and experienced utility in behavioral public economics?
What is one way behavioral economics influences public policy according to the text?
What is one way behavioral economics influences public policy according to the text?
In the context of tax incidence, what does an ad-valorem tax refer to?
In the context of tax incidence, what does an ad-valorem tax refer to?
What is the price elasticity of supply (εS) based on in the partial equilibrium model?
What is the price elasticity of supply (εS) based on in the partial equilibrium model?
What does the equilibrium condition Q = S(p) = D(p + t) define?
What does the equilibrium condition Q = S(p) = D(p + t) define?
In the formula for tax incidence in the partial equilibrium model, what does dq dp εS = 1+ represent?
In the formula for tax incidence in the partial equilibrium model, what does dq dp εS = 1+ represent?
How is the incidence on consumers calculated in the partial equilibrium model?
How is the incidence on consumers calculated in the partial equilibrium model?
What does the concavity of the production function signify in terms of tax incidence?
What does the concavity of the production function signify in terms of tax incidence?
What does the price elasticity of demand (εD) reveal about demand behavior?
What does the price elasticity of demand (εD) reveal about demand behavior?
In tax incidence, how is the effect of a tax on price characterized?
In tax incidence, how is the effect of a tax on price characterized?
What does differentiating the equilibrium condition help determine in the partial equilibrium model?
What does differentiating the equilibrium condition help determine in the partial equilibrium model?
How are consumers' preferences reflected in determining demand in the partial equilibrium model?
How are consumers' preferences reflected in determining demand in the partial equilibrium model?
What type of tax was the sales tax on gas discussed in the example?
What type of tax was the sales tax on gas discussed in the example?
What is the term for the method used to compare treated states with neighboring states in the example?
What is the term for the method used to compare treated states with neighboring states in the example?
In which state was the sales tax on gas suspended due to an energy emergency in the example?
In which state was the sales tax on gas suspended due to an energy emergency in the example?
What aspect of the gas prices suggests that the reinstatement of the sales tax was not tied to market conditions?
What aspect of the gas prices suggests that the reinstatement of the sales tax was not tied to market conditions?
What change occurred on October 30 in relation to the gas sales tax in Indiana?
What change occurred on October 30 in relation to the gas sales tax in Indiana?
What percentage of the gas price was subject to sales tax in Illinois according to the example?
What percentage of the gas price was subject to sales tax in Illinois according to the example?
Why were excise taxes not affected by the moratorium on the sales tax, according to the example?
Why were excise taxes not affected by the moratorium on the sales tax, according to the example?
What principle did the study by Doyle and Samphantharak (2008) aim to identify concerning gas taxes?
What principle did the study by Doyle and Samphantharak (2008) aim to identify concerning gas taxes?
What is the primary focus of tax incidence studies?
What is the primary focus of tax incidence studies?
In tax incidence, what happens when prices are constant?
In tax incidence, what happens when prices are constant?
What does the elasticity of demand with respect to price play a crucial role in?
What does the elasticity of demand with respect to price play a crucial role in?
In partial equilibrium incidence analysis, what does mobility of labor and capital impact?
In partial equilibrium incidence analysis, what does mobility of labor and capital impact?
What is a key consideration when estimating tax incidence using difference-in-difference estimation?
What is a key consideration when estimating tax incidence using difference-in-difference estimation?
How does the introduction of an Earned Income Tax Credit (EITC) impact market prices?
How does the introduction of an Earned Income Tax Credit (EITC) impact market prices?
What is a common misconception about tax changes and producer profits?
What is a common misconception about tax changes and producer profits?
What does the elasticity of demand w.r.t. price indicate in tax incidence analysis?
What does the elasticity of demand w.r.t. price indicate in tax incidence analysis?
'Incidence' refers to the study of:
'Incidence' refers to the study of:
What does the term 'salience effects' refer to in tax incidence studies?
What does the term 'salience effects' refer to in tax incidence studies?
What is the estimated pass-through rate of a tax decrease based on the text?
What is the estimated pass-through rate of a tax decrease based on the text?
What range is the elasticity of demand thought to be in?
What range is the elasticity of demand thought to be in?
In empirical applications, what is the effect of a tax increase on prices?
In empirical applications, what is the effect of a tax increase on prices?
What measure is used for relative incidence in the case of tax repeal in Indiana (IN)?
What measure is used for relative incidence in the case of tax repeal in Indiana (IN)?
What effect does an excise tax repeal have on the pass-through rate in Illinois (IL)?
What effect does an excise tax repeal have on the pass-through rate in Illinois (IL)?
How does the elasticity of supply change with a pass-through rate of 0.7?
How does the elasticity of supply change with a pass-through rate of 0.7?
In the context of Hastings and Washington's study, what aspect of grocery store pricing is affected by food stamps subsidy?
In the context of Hastings and Washington's study, what aspect of grocery store pricing is affected by food stamps subsidy?
What motivates using scanner data from grocery stores in high-poverty areas and low-poverty areas?
What motivates using scanner data from grocery stores in high-poverty areas and low-poverty areas?
'Diff-in-Diff Results: Tax-Repeal' section implies which area has a higher relative incidence based on the measures provided?
'Diff-in-Diff Results: Tax-Repeal' section implies which area has a higher relative incidence based on the measures provided?
Based on the text, what effect does receiving food stamps at the beginning of the month have?
Based on the text, what effect does receiving food stamps at the beginning of the month have?
What approach was used by Doyle and Samphantharak (2008) to estimate the effect of a gas tax moratorium on consumer behavior?
What approach was used by Doyle and Samphantharak (2008) to estimate the effect of a gas tax moratorium on consumer behavior?
What key factor suggests potential asymmetries in consumer response to changes in gas prices?
What key factor suggests potential asymmetries in consumer response to changes in gas prices?
In tax incidence analysis, what does a sharp discontinuity at the time of tax repeal and reinstatement indicate?
In tax incidence analysis, what does a sharp discontinuity at the time of tax repeal and reinstatement indicate?
What does the term 'salient tax' refer to in the context of gas tax studies?
What does the term 'salient tax' refer to in the context of gas tax studies?
What empirical technique did Doyle and Samphantharak (2008) use to analyze the effects of a gas tax moratorium?
What empirical technique did Doyle and Samphantharak (2008) use to analyze the effects of a gas tax moratorium?
What aspect of the gas tax study by Doyle and Samphantharak (2008) suggests that the reinstatement of the sales tax was not driven by market conditions?
What aspect of the gas tax study by Doyle and Samphantharak (2008) suggests that the reinstatement of the sales tax was not driven by market conditions?
How does the full-shifting of sales tax imply different price changes in Illinois and Indiana?
How does the full-shifting of sales tax imply different price changes in Illinois and Indiana?
What key institutional background factor led to the suspension of the sales tax on gas in Illinois and Indiana?
What key institutional background factor led to the suspension of the sales tax on gas in Illinois and Indiana?
What estimation method was used by Doyle and Samphantharak (2008) to compare treated states with neighboring states in the gas tax study?
What estimation method was used by Doyle and Samphantharak (2008) to compare treated states with neighboring states in the gas tax study?
What does the presence of quality differences in a product impact in terms of tax burden distribution?
What does the presence of quality differences in a product impact in terms of tax burden distribution?
Explain the concept of tax incidence and its relevance in public economics.
Explain the concept of tax incidence and its relevance in public economics.
Describe the difference between economic and statutory incidence of taxes.
Describe the difference between economic and statutory incidence of taxes.
What is the main focus of partial equilibrium incidence analysis?
What is the main focus of partial equilibrium incidence analysis?
How do salience effects influence tax incidence?
How do salience effects influence tax incidence?
Provide an example of an empirical application of tax incidence.
Provide an example of an empirical application of tax incidence.
How does the elasticity of demand affect tax incidence?
How does the elasticity of demand affect tax incidence?
Explain the graphical representation of tax incidence.
Explain the graphical representation of tax incidence.
How do changes in production and utility functions influence tax incidence?
How do changes in production and utility functions influence tax incidence?
Discuss the role of tax incidence in policy evaluation.
Discuss the role of tax incidence in policy evaluation.
How do tax salience effects affect price changes and market outcomes?
How do tax salience effects affect price changes and market outcomes?
Explain the concept of partial equilibrium incidence in tax analysis.
Explain the concept of partial equilibrium incidence in tax analysis.
Describe the graphical examples used to build intuition in partial equilibrium tax analysis.
Describe the graphical examples used to build intuition in partial equilibrium tax analysis.
What is the formula for tax incidence in a partial equilibrium model and how is it derived?
What is the formula for tax incidence in a partial equilibrium model and how is it derived?
How is the effect of a tax on price characterized in partial equilibrium incidence analysis?
How is the effect of a tax on price characterized in partial equilibrium incidence analysis?
Explain the concept of salience effects in tax analysis.
Explain the concept of salience effects in tax analysis.
How does perfect competition influence the partial equilibrium model in tax analysis?
How does perfect competition influence the partial equilibrium model in tax analysis?
What role does the price elasticity of demand (εD) play in understanding tax effects?
What role does the price elasticity of demand (εD) play in understanding tax effects?
How is the price elasticity of supply (εS) utilized in tax analysis?
How is the price elasticity of supply (εS) utilized in tax analysis?
Explain the equilibrium condition in the partial equilibrium model of tax analysis.
Explain the equilibrium condition in the partial equilibrium model of tax analysis.
What is the primary goal of analyzing tax incidence in a partial equilibrium model?
What is the primary goal of analyzing tax incidence in a partial equilibrium model?
Explain how the pass-through rate of 0.7 relates to the supply elasticity range of 0.1 - 0.6.
Explain how the pass-through rate of 0.7 relates to the supply elasticity range of 0.1 - 0.6.
What is the relationship between the supply elasticity and the pass-through rate in tax incidence analysis?
What is the relationship between the supply elasticity and the pass-through rate in tax incidence analysis?
Define what 'salience effects' refer to in tax incidence studies.
Define what 'salience effects' refer to in tax incidence studies.
How does the concept of 'salience effects' impact consumer behavior in relation to taxes?
How does the concept of 'salience effects' impact consumer behavior in relation to taxes?
Explain the significance of using scanner data from high-poverty and low-poverty areas in studying the impact of food stamps on grocery store pricing.
Explain the significance of using scanner data from high-poverty and low-poverty areas in studying the impact of food stamps on grocery store pricing.
How does the timing of food stamps arrival (e.g., first of the month) provide a unique opportunity to study consumer behavior in relation to grocery store pricing?
How does the timing of food stamps arrival (e.g., first of the month) provide a unique opportunity to study consumer behavior in relation to grocery store pricing?
What does the elasticity of demand range from -0.05 to -0.25 suggest about consumer responsiveness to price changes?
What does the elasticity of demand range from -0.05 to -0.25 suggest about consumer responsiveness to price changes?
How is the pass-through rate of 0.7 related to the supply elasticity range in the context of tax incidence analysis?
How is the pass-through rate of 0.7 related to the supply elasticity range in the context of tax incidence analysis?
Explain the implications of the pass-through rate in tax incidence analysis for consumers.
Explain the implications of the pass-through rate in tax incidence analysis for consumers.
How does the difference-in-difference methodology help analyze the impact of a tax repeal on pricing behavior in different states?
How does the difference-in-difference methodology help analyze the impact of a tax repeal on pricing behavior in different states?
Flashcards are hidden until you start studying
Study Notes
Introduction to Public Economics
- Public economics is the study of the role of the government in the economy.
- The government is instrumental in many aspects of economic life, including:
- Regulation
- Taxation
- Expenditures on public goods and welfare state
Size of the Public Sector
- The size of the public sector is significant, with governments collecting 35-50% of national income in taxes.
- Public sector expenditures fund public goods (infrastructure, defense) and welfare state (retirement benefits, health care, income support).
Role of the Government
- The government intervenes in the economy due to:
- Market failures (e.g., pollution)
- Individual failures (e.g., myopic behavior)
- Inequality and redistribution
- The government's role can be seen as a corrective measure to address these issues.
Behavioral Public Economics
- Behavioral public economics incorporates insights from psychology into economic models to improve policy decisions.
- The approach is pragmatic and policy-oriented, focusing on:
- New policy tools (e.g., changing default options)
- Better predictions about policy effects (e.g., incorporating behavioral features into neoclassical models)
- New welfare implications (e.g., accounting for gaps between decision and experienced utility)
Eliciting the People's View
- Large-scale online surveys and experiments are used to understand how people think and form their views on economic and social policies.
- Examples of research in this area include:
- Kuziemko et al. (2015) on preferences for redistribution
- Stantcheva (2021) on understanding tax policy and how people reason
- Alesina et al. (2021) on immigration and redistribution
- Ferrario & Stantcheva (2022) on eliciting people's first-order concerns through text analysis of open-ended survey questionsHere are the study notes:
Background of Socioeconomic Questions
- Socioeconomic questions include highest level of education achieved, main source of news, and political orientation
- Political orientation classifies individuals as "very conservative" to "very liberal" and their political affiliation (Republican, Democrat, Independent, Other, Nonaffiliated)
Knowledge of Tax Policy
- Knowledge about tax policy includes:
- Top federal taxes
- Threshold for the top income tax bracket
- Top tax rates in the 1950s
- Share of households paying no income tax
- Average tax rate for the median household or top household
- Share of total income that goes to the top 1%
- Occupational composition of the top 1% of earners
Elements of Survey
- Information treatment: a randomly chosen subsample of respondents was shown one of three versions of an instructional video that provided information about the policy
- Eliciting people's views on understanding tax policy, including:
- Behavioral responses
- Efficiency effects
- Effects on the broader economy
- Distributional consequences for different groups
- Fairness concerns
Empirical Applications
- Graphical analysis: effect of a tax increase (prices rose by about 4% in IN and IL)
- Diff-in-Diff results: tax repeal in Indiana and Illinois
- Estimated effects imply an approximately 70% pass-through rate
- Elasticity of demand is thought to be in the range of -0.05 to -0.25
- Hastings and Washington (2010): the first of the month effect on consumer behavior and store responses
- Studying how food stamps subsidy affects grocery store pricing
- Scanner data from several grocery stores in Nevada
- Doyle and Samphantharak (2008): who bears the burden of the gas tax?
- Studying the effects of a gas tax moratorium
- Institutional background: election year in Indiana, exceptional gas prices, and a political desire to provide tax relief
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
