American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 2 2 May 2010 http://www.aeaweb.org/issue.php?journal=POL&volume=2&issue=2 Journal Article Front Matter and Editor's Note Alan J.AuerbachU CA, Berkeley i ii http://www.aeaweb.org/articles.php?doi=10.1257/pol.2.2.i 10.1257/pol.2.2.i American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 2 2 May 2010 http://www.aeaweb.org/issue.php?journal=POL&volume=2&issue=2 Journal Article Public Provision of Private Goods and Nondistortionary Marginal Tax Rates SörenBlomquistUppsala Center for Fiscal Studies, Uppsala U VidarChristiansenU Oslo LucaMichelettoU Milan and Econpubblica, Bocconi U 1 27 Using an optimal taxation model combined with a previously neglected scheme of public provision of private goods, we show that there is an efficiency gain if public provision of selected goods replaces market purchases and that efficiency requires marginal income tax rates to be higher than if the goods were purchased in the market. Part of the marginal tax serves the same role as a market price and conveys information about a real social cost of working more hours. It might be that economies with higher marginal tax rates have less severe distortions than economies with lower marginal tax rates. (JEL H21, H42, I38) http://www.aeaweb.org/articles.php?doi=10.1257/pol.2.2.1 10.1257/pol.2.2.1 http://www.aeaweb.org/aej/pol/data/2008-0058_data.zip American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 2 2 May 2010 http://www.aeaweb.org/issue.php?journal=POL&volume=2&issue=2 Journal Article A Greater Price for a Greater Good? Evidence That Consumers Pay More for Charity-Linked Products Daniel W.ElfenbeinWashington U in St Louis BrianMcManusU NC 28 60 To study whether consumers will pay more for products that generate charitable donations, we analyze data from eBay on charity and noncharity auctions of otherwise identical products. Charity prices are 6 percent higher, on average, than noncharity prices. Bids below the closing price are also higher, as are bids by individuals bidding on identical charity and noncharity products. Bidders appear to value charity revenue at least partially as a public good, as they submit bids earlier in charity auctions, stimulating other bidders to bid more aggressively. Our results help explain why firms may pledge charitable donations, green production, or similar activities. (JEL D12, D44, D64, L81, M14, M31) http://www.aeaweb.org/articles.php?doi=10.1257/pol.2.2.28 10.1257/pol.2.2.28 http://www.aeaweb.org/aej/pol/data/2008-0041_data.zip American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 2 2 May 2010 http://www.aeaweb.org/issue.php?journal=POL&volume=2&issue=2 Journal Article The Micro-geography of Tax Avoidance: Evidence from Littered Cigarette Packs in Chicago DavidMerrimanU IL, Chicago 61 84 The large tax differentials between Chicago and neighboring jurisdictions provide an incentive for cigarette tax avoidance. Data from a random sample of cigarette packs littered in Chicago reveals a startling degree of tax avoidance: three-quarters did not display a Chicago tax stamp. Also, the $2.68 difference between the tax in Chicago and surrounding counties decreases the probability of a local stamp by almost 60 percent, and a one mile increase in distance to the lower-tax state border increases the probability a pack of a local stamp by about one percent. These results are consistent with the predictions of economic theory. (JEL H25, H26, H71) http://www.aeaweb.org/articles.php?doi=10.1257/pol.2.2.61 10.1257/pol.2.2.61 http://www.aeaweb.org/aej/pol/data/2008-0088_data.zip American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 2 2 May 2010 http://www.aeaweb.org/issue.php?journal=POL&volume=2&issue=2 Journal Article Optimal Taxation and Social Insurance with Endogenous Private Insurance RajChettyHarvard U EmmanuelSaezU CA, Berkeley 85 114 We characterize welfare gains from government intervention when the private sector provides partial insurance. We analyze models in which adverse selection, pre-existing information, or imperfect optimization create a role for government intervention. We derive formulas that map existing empirical estimates into quantitative predictions for optimal policy. When private insurance generates moral hazard, standard formulas for optimal government insurance must be modified to account for fiscal externalities. In contrast, standard formulas are unaffected by "informal" private insurance that does not generate moral hazard. Applications to health and unemployment show that formal private market insurance can significantly reduce optimal government benefit rates. (JEL D82, G22, H21, H23, J65) http://www.aeaweb.org/articles.php?doi=10.1257/pol.2.2.85 10.1257/pol.2.2.85 http://www.aeaweb.org/aej/pol/data/2008-0137_data.zip American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 2 2 May 2010 http://www.aeaweb.org/issue.php?journal=POL&volume=2&issue=2 Journal Article Are Tax Incentives for Charitable Giving Efficient? Evidence from France GabrielleFackU Pompeu Fabra and Barcelona Graduate School of Economics CamilleLandaisU CA, Berkeley 117 41 This paper estimates the effect of tax incentives for charitable contributions in France. We focus on two reforms that increased the nonrefundable tax credit rate for charitable contributions by 32 percent. We use a difference-in-difference identification, comparing the evolution of contributions for groups of households with similar income, but different taxable status due to differences in family size. We control for censoring issues and investigate distributional effects using a three-step censored quantile regression estimator. We find that the price elasticity of contributions is relatively small, but tends to increase with the level of gifts. (JEL D14, D64, H24) http://www.aeaweb.org/articles.php?doi=10.1257/pol.2.2.117 10.1257/pol.2.2.117 http://www.aeaweb.org/aej/pol/data/2008-0138_data.zip American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 2 2 May 2010 http://www.aeaweb.org/issue.php?journal=POL&volume=2&issue=2 Journal Article The First of the Month Effect: Consumer Behavior and Store Responses JustineHastingsYale U EbonyaWashingtonYale U 142 62 Previous research has demonstrated that benefit recipients decrease expenditures on, and consumption of, food throughout the benefit month. Using detailed grocery store scanner data, we ask two questions: whether cycling is due to a desire for variety that leads to within-month substitution across product quality, and whether cycling is driven by countercyclical retail pricing. We find that the decrease in food expenditures is largely driven by reductions in quantity, not quality, and that prices for foods purchased by benefit households vary pro-cyclically with demand, implying that households could save money by delaying their food purchases until later in the month. (JEL D12, I38) http://www.aeaweb.org/articles.php?doi=10.1257/pol.2.2.142 10.1257/pol.2.2.142 http://www.aeaweb.org/aej/pol/data/2008-0139_data.zip American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 2 2 May 2010 http://www.aeaweb.org/issue.php?journal=POL&volume=2&issue=2 Journal Article Child Benefit Support and Method of Payment: Evidence from a Randomized Experiment in Belgium MariekeHuysentruytLondon School of Economics and SITE, Stockholm School of Economics EvaLefevereHerman Deleeck Centre for Social Policy, U Antwerp 163 84 We examine the effects of information and information presentation format on individuals' choice of payment method in a large randomized experiment carried out with the Belgian National Office for Family Benefits. We find that a one-time mailing providing information about method of payment for child benefit support caused a fourfold increase in parents' decision to switch from payment by check to electronic payment. Simple, low-cost supplements significantly raised people's responsiveness to the mailing. Our results suggest that complexity and information (processing) costs pose significant barriers to transitioning to electronic payment methods, and that deliberate efforts to lower these costs can contribute to large behavioral changes. (JEL D83, J13) http://www.aeaweb.org/articles.php?doi=10.1257/pol.2.2.163 10.1257/pol.2.2.163 http://www.aeaweb.org/aej/pol/data/2008-0131_data.zip American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 2 2 May 2010 http://www.aeaweb.org/issue.php?journal=POL&volume=2&issue=2 Journal Article Estimating the Effect of Student Aid on College Enrollment: Evidence from a Government Grant Policy Reform Helena SkytNielsenAarhus U and IZA, Bonn TorbenSørensenAarhus U ChristopherTaberU WI 185 215 In this paper, we estimate the response of college enrollment to changes in student aid arising from a Danish reform. We separately identify the effect of aid from that of other observed and unobserved variables such as parental income. We exploit the combination of a kinked aid scheme and a reform to identify the effect of direct costs on enrollment. To allow for potential biases due to borrowing constraints, we use detailed information on parents' assets. We find that enrollment is less responsive than found in other studies and that borrowing constraints only deter college enrollment to a minor extent. (JEL H52, I22, I23) http://www.aeaweb.org/articles.php?doi=10.1257/pol.2.2.185 10.1257/pol.2.2.185 http://www.aeaweb.org/aej/pol/data/2008-0150_data.zip