Taxing a Commodity With and Without Revenue Neutrality: An Exploration Using a Calibrated Theoretical Consumer Equilibrium Model

It has long been recognized that taxing a commodity that generates negative externalities can be used to reduce the consumption of that commodity. A variant involves the imposition of revenue neutrality but that may alter the tax rate required to meet a consumption reduction target. We explore the relationships among the commodity tax rate, the demand and supply elasticities, and the revenue offsets by calibrating a theoretical consumer equilibrium model and then recalibrating it with alternative parameter configurations. For each configuration we simulate equilibrium for three policy scenarios: no neutrality, neutrality achieved by subsidizing other commodities, and neutrality achieved by income transfer.Consumer Market Equilibrium; Commodity Taxation; Revenue Neutrality

Aggregation and Other Biases in the Calculation of Consumer Elasticities for Models of Arbitrary Rank

Consumer-related policy decisions often require analysis of aggregate responses or mean elasticities. However, in practice these mean elasticities are seldom used. Mean elasticities can be approximated using aggregate data, but that introduces aggregation bias for full and compensated price elasticities, though interestingly not for expenditure elasticities. The biases corresponding to incorrect approximations of mean elasticities depend on the type of data (micro or aggregate), the type and rank of the model, and generalized measures of income inequality. These biases are distinct from the biases (already noted in the literature) when using aggregate data to estimate micro elasticites at mean income.Aggregate price and expenditure elasticities, aggregation bias, consumer demand, generalized measures of income inequality, income distribution

Aggregation Effects on Price and Expenditure Elasticities in a Quadratic Almost Ideal Demand System

While it is well known that demand elasticities calculated at the macro level will in general differ from those calculated at the micro level because of aggregation effects there remain the questions of how large the effects are, and how they vary with the degree of nonuniformity in the income distribution. We explore those questions with models based on a quadratic version of the Almost Ideal Demand System. We investigate the elasticity differences theoretically and then calibrate the models and generate numerical results, using income data for seven countries with widely different distributions. The aggregation effects are found generally to be rather small, even with highly nonuniform income distributions.demand elasticities; aggregation effects; quadratic almost ideal demand system

Exploring the Effects of Aggregation Error in the Estimation of Consumer Demand Elasticities

Errors introduced by using aggregate data in estimating a consumer demand model have long been a concern. We study the effects of such errors on elasticity estimates derived from AIDS and QUAIDS models. Based on a survey of published articles, a generic parameterization of the income distribution, and the range of Gini coefficients reported for 28 OECD countries, we generate and analyse a large number of “observations” on the differences between elasticities calculated at the aggregate level and those calculated at the micro level. We suggest a procedure for evaluating the likely range of aggregation error when a model is estimated with aggregate data.Aggregation error; Consumer demand elasticities; AIDS/QUAIDS models; Income distribution

Exploring the Effects of Aggregation Error in the Estimation of Consumer Demand Elasticities

Errors introduced by using aggregate data in estimating a consumer demand model have long been a concern. We study the effects of such errors on elasticity estimates derived from AIDS and QUAIDS models. Based on a survey of published articles, a generic parameterization of the income distribution, and the range of Gini coefficients reported for 28 OECD countries, we generate and analyse a large number of “observations” on the differences between elasticities calculated at the aggregate level and those calculated at the micro level. We suggest a procedure for evaluating the likely range of aggregation error when a model is estimated with aggregate data.Aggregation error; Consumer demand elasticities; AIDS/QUAIDS models; Income distribution

Dynamical transition for a particle in a squared Gaussian potential

We study the problem of a Brownian particle diffusing in finite dimensions in a potential given by $\psi= \phi^2/2$ where $\phi$ is Gaussian random field. Exact results for the diffusion constant in the high temperature phase are given in one and two dimensions and it is shown to vanish in a power-law fashion at the dynamical transition temperature. Our results are confronted with numerical simulations where the Gaussian field is constructed, in a standard way, as a sum over random Fourier modes. We show that when the number of Fourier modes is finite the low temperature diffusion constant becomes non-zero and has an Arrhenius form. Thus we have a simple model with a fully understood finite size scaling theory for the dynamical transition. In addition we analyse the nature of the anomalous diffusion in the low temperature regime and show that the anomalous exponent agrees with that predicted by a trap model.Comment: 18 pages, 4 figures .eps, JPA styl

Age, Retirement and Expenditure Patterns: An Econometric Study of Older Canadian Households

The paper explores the allocation of consumption expenditure by the older population among different categories of goods and services, and how expenditure patterns change with age within that population. Of particular interest is whether observed differences between pre-retirement and post-retirement patterns are a consequence of changes in "tastes" or reductions in income. An adapted form of the Deaton and Muellbauer Almost Ideal Demand System is estimated with data from six Family Expenditure Surveys and used to investigate that question. The findings suggest that observed changes in budget allocations are most closely related to reductions in income.consumption expenditure; retirement; income

Shell-Model Monte Carlo Simulations of BCS-BEC Crossover in Few-Fermion Systems

We study a trapped system of fermions with a zero-range two-body interaction using the shell-model Monte Carlo method, providing {\em ab initio} results for the low particle number limit where mean-field theory is not applicable. We present results for the $N$-body energies as function of interaction strength, particle number, and temperature. The subtle question of renormalization in a finite model space is addressed and the convergence of our method and its applicability across the BCS-BEC crossover is discussed. Our findings indicate that very good quantitative results can be obtained on the BCS side, whereas at unitarity and in the BEC regime the convergence is less clear. Comparison to N=2 analytics at zero and finite temperature, and to other calculations in the literature for $N>2$ show very good agreement.Comment: 6 pages, 5 figures, Revtex4, final versio

Perturbation theory for the effective diffusion constant in a medium of random scatterer

We develop perturbation theory and physically motivated resummations of the perturbation theory for the problem of a tracer particle diffusing in a random media. The random media contains point scatterers of density $\rho$ uniformly distributed through out the material. The tracer is a Langevin particle subjected to the quenched random force generated by the scatterers. Via our perturbative analysis we determine when the random potential can be approximated by a Gaussian random potential. We also develop a self-similar renormalisation group approach based on thinning out the scatterers, this scheme is similar to that used with success for diffusion in Gaussian random potentials and agrees with known exact results. To assess the accuracy of this approximation scheme its predictions are confronted with results obtained by numerical simulation.Comment: 22 pages, 6 figures, IOP (J. Phys. A. style