American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 2 3 August 2010 http://www.aeaweb.org/issue.php?journal=POL&volume=2&issue=3 Journal Article Front Matter i i http://www.aeaweb.org/articles.php?doi=10.1257/pol.2.3.i 10.1257/pol.2.3.i American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 2 3 August 2010 http://www.aeaweb.org/issue.php?journal=POL&volume=2&issue=3 Journal Article Dividend and Corporate Taxation in an Agency Model of the Firm RajChettyHarvard U EmmanuelSaezU CA, Berkeley 1 31 Recent evidence on the effect of dividend taxes on firm behavior is inconsistent with neoclassical theories of dividend and corporate taxation. We develop a simple agency model in which managers and shareholders have conflicting interests to explain the evidence. In this model, dividend taxation induces managers to undertake unproductive investments by retaining earnings, and creates a first-order deadweight cost. In contrast, corporate taxes do not distort the manager's payout decision and may only create second-order efficiency costs. Corporate income taxation may therefore be a more efficient way to generate revenue than dividend taxation, challenging existing intuitions based on neoclassical models. (JEL D21, G35, H25, H32) http://www.aeaweb.org/articles.php?doi=10.1257/pol.2.3.1 10.1257/pol.2.3.1 http://www.aeaweb.org/aej/pol/data/2008-0065_data.zip American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 2 3 August 2010 http://www.aeaweb.org/issue.php?journal=POL&volume=2&issue=3 Journal Article The Effect of Fast Food Restaurants on Obesity and Weight Gain JanetCurrieColumbia U StefanoDella VignaU CA, Berkeley EnricoMorettiU CA, Berkeley VikramPathaniaCornerstone Research, San Francisco, CA 32 63 We investigate how changes in the supply of fast food restaurants affect weight outcomes of 3 million children and 3 million pregnant women. Among ninth graders, a fast food restaurant within 0.1 miles of a school results in a 5.2 percent increase in obesity rates. Among pregnant women, a fast-food restaurant within 0.5 miles of residence results in a 1.6 percent increase in the probability of gaining over 20 kilos. The implied effects on caloric intake are one order of magnitude larger for children than for mothers, consistent with smaller travel cost for adults. Non-fast food restaurants and future fast-food restaurants are uncorrelated with weight outcomes. (JEL I12, J13, J16, L83) http://www.aeaweb.org/articles.php?doi=10.1257/pol.2.3.32 10.1257/pol.2.3.32 http://www.aeaweb.org/aej/pol/data/2009-0063_data.zip http://www.aeaweb.org/aej/pol/app/2009-0063_app.pdf American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 2 3 August 2010 http://www.aeaweb.org/issue.php?journal=POL&volume=2&issue=3 Journal Article The General Equilibrium Incidence of Environmental Mandates DonFullertonU IL GarthHeutelU NC, Greensboro 64 89 Pollution regulations affect factor demands, relative returns, production, and output prices. In our model, one sector includes pollution as an input that can be a complement or substitute for labor or capital. For each type of mandate, we find conditions where more burden is on labor or on capital. Stricter regulation does not always place less burden on the better substitute for pollution. Also, restrictions on pollution per unit output create an "output-subsidy effect" on factor prices that can reverse the usual output and substitution effects. We find analogous effects for a restriction on pollution per unit capital. (JEL H23, Q53, Q58) http://www.aeaweb.org/articles.php?doi=10.1257/pol.2.3.64 10.1257/pol.2.3.64 http://www.aeaweb.org/aej/pol/data/2008-0037_data.zip http://www.aeaweb.org/aej/pol/app/2008-0037_app.pdf American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 2 3 August 2010 http://www.aeaweb.org/issue.php?journal=POL&volume=2&issue=3 Journal Article Is Lottery Gambling Addictive? JonathanGuryanU Chicago Melissa S.KearneyU MD 90 110 We present an empirical test for the addictiveness of lottery gambling that exploits an exogenous shock to local market consumption of lottery gambling. It uses the sale of a winning jackpot ticket in a zip code as an instrument for present consumption and tests for a causal relationship between present and future consumption. This test estimates the time path of persistence nonparametrically. Data from the Texas State Lottery suggests that after 6 months, roughly half of the initial increase in lottery consumption is maintained. After 18 months, roughly 40 percent of the initial shock persists, though estimates become less precise. (JEL D12, H27, H71) http://www.aeaweb.org/articles.php?doi=10.1257/pol.2.3.90 10.1257/pol.2.3.90 http://www.aeaweb.org/aej/pol/data/2009-0004_data.zip American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 2 3 August 2010 http://www.aeaweb.org/issue.php?journal=POL&volume=2&issue=3 Journal Article Trade Restrictiveness and Deadweight Losses from US Tariffs Douglas A.IrwinDartmouth College 111 33 This paper calculates a trade restrictiveness index, i.e., the uniform tariff that yields the same welfare loss as an existing tariff structure, for nearly a century of US data. The results show that the average tariff understates the TRI by about 75 percent. The static deadweight loss from US tariffs is about 1 percent of GDP after the Civil War, but falls almost continuously thereafter to less than one-tenth of 1 percent of GDP. Import duties produced an average welfare loss of 40 cents for every dollar of revenue, slightly higher than contemporary estimates of the marginal cost of taxation. (JEL F13, N71, N72) http://www.aeaweb.org/articles.php?doi=10.1257/pol.2.3.111 10.1257/pol.2.3.111 http://www.aeaweb.org/aej/pol/data/2009-0002_data.zip American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 2 3 August 2010 http://www.aeaweb.org/issue.php?journal=POL&volume=2&issue=3 Journal Article The Price of Gasoline and New Vehicle Fuel Economy: Evidence from Monthly Sales Data ThomasKlierFederal Reserve Bank of Chicago JoshuaLinnMIT 134 53 This paper uses a unique dataset of monthly new vehicle sales by detailed model from 1978 to 2007, and implements a new identification strategy to estimate the effect of the price of gasoline on individual vehicle model sales. We control for unobserved vehicle and consumer characteristics by using within model year changes in the price of gasoline and sales. We find a significant sales response, suggesting that the gasoline price increase from 2002 to 2007 explains nearly half of the decline in market share of US manufacturers. On the other hand, an increase in the gasoline tax would only modestly raise average fuel economy. (JEL H25, L11, L62, L71) http://www.aeaweb.org/articles.php?doi=10.1257/pol.2.3.134 10.1257/pol.2.3.134 http://www.aeaweb.org/aej/pol/data/2008-0143_data.zip American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 2 3 August 2010 http://www.aeaweb.org/issue.php?journal=POL&volume=2&issue=3 Journal Article Dynamic Commitment and the Soft Budget Constraint: An Empirical Test PerPettersson-LidbomStockholm U 154 79 This paper develops an empirical framework for the problem of soft budgets which is explicitly based on a dynamic commitment problem, i.e., the inability of a supporting organization to commit itself not to extend more resources ex post to a budget-constrained organization than it was prepared to provide ex ante. Swedish local governments are used as a testing ground since the central government distributed a large number of fiscal transfers. The estimated soft-budget effect is economically significant: on average, a local government increases its debt by more than 20 percent by going from a hard to a soft budget constraint. (JEL D82, G32, L32) http://www.aeaweb.org/articles.php?doi=10.1257/pol.2.3.154 10.1257/pol.2.3.154 http://www.aeaweb.org/aej/pol/data/2009-0009_data.zip American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 2 3 August 2010 http://www.aeaweb.org/issue.php?journal=POL&volume=2&issue=3 Journal Article Do Taxpayers Bunch at Kink Points? EmmanuelSaezU CA, Berkeley 180 212 This paper uses tax return data to analyze bunching at the kink points of the US income tax schedule. We estimate the compensated elasticity of reported income with respect to (one minus) the marginal tax rate using bunching evidence. We find clear evidence of bunching around the first kink point of the Earned Income Tax Credit but concentrated solely among the self-employed. A simple tax evasion model can account for those results. We find evidence of bunching at the threshold of the first income tax bracket where tax liability starts but no evidence of bunching at any other kink point. (JEL H23, H24, H26) http://www.aeaweb.org/articles.php?doi=10.1257/pol.2.3.180 10.1257/pol.2.3.180 http://www.aeaweb.org/aej/pol/data/2009-0060_data.zip