Positional preferences in time and space: Optimal income taxation with dynamic social comparisons

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This paper concerns optimal redistributive non-linear income taxation in an OLG model, where people care about their own consumption relative to (i) other people's current consumption, (ii) own past consumption, and (iii) other people's past consumption. We show that both (i) and (iii) affect the marginal income tax structure whereas (ii) does not. We also derive conditions under which atemporal and intertemporal consumption comparisons give rise to exactly the same tax policy responses.

Policy Design

Does the Nonfarm Economy Offer Pathways for Upward Mobility? Evidence from a Panel Data Study in Ethiopia

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Empirical studies across many developing countries routinely document a positive correlation between participation in rural nonfarm employment and households’ wealth or income.

Experiments

Reference-dependent behaviour of paua (abalone) divers in New Zealand

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We study dynamic labour supply using data on paua (abalone) divers in New Zealand. The divers face stable, flat prices per kilogram after each catch, but experience transitory wage changes due to varying weather and water conditions, and are free to vary their daily working hours and display an intermittent working pattern. We find nonlinear wage elasticities, rejecting the standard neo-classical prediction that these divers should work long hours during days when wages are high and quit early during days when hourly wages are low.

Fisheries

Effect of Nonfarm Income on Household Food Security in Eastern Tigrai, Ethiopia: An Entitlement Approach

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The study attempts to investigate the link between food security and nonfarm employment using the survey data collected from 151 randomly selected households from six villages of Woreda Gantafeshum, Eastern Tigrai, Ethiopia.

Experiments

Urban Fuel Demand in Ethiopia: An Almost-Ideal Demand System Approach

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This paper investigates the opportunities for reducing the pressure of urban centers on rural forest areas, using a dataset of 350 urban households in Tigrai in northern Ethiopia.

 

We applied an almost‐ideal demand system to fuels. The results suggest that reducing the pressure of urban centers on local forests cannot be seen in isolation from broader development policies aimed at raising the level of education and income of the population. Higher income also stimulates the demand for fuel.

Climate Change, Energy

Controlling Urban Air Pollution Caused by Households: Uncertainty, Prices, and Income

Submitted by NENRE Concepcion on

We examine the control of air pollution caused by households burning wood for heating and cooking in the developing world. Since the problem is one of controlling emissions from nonpoint sources, regulations are likely to be directed at household choices of wood consumption and combustion technologies. Moreover, these choices are subtractions from, or contributions to, the pure public good of air quality. Consequently, the efficient policy design is not independent of the distribution of household income.

Policy Design, Urban

Pathways to breaking the poverty trap in Ethiopia: Investments in agricultural water, education, and markets

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EfD Authors:

Investments in agricultural water management should complement or strengthen the livelihood and coping systems of the rural poor, and should thus be instrumental for breaking the poverty trap in Ethiopia.

Agriculture, Policy Design