The economics of a temporary VAT cut

1. The rate of VAT has been cut temporarily to 15%, with a return to 17.5% in place for the end of 2009. The government has predicted that this will increase consumer spending by about 0.5%. Much of the analysis of this tax cut has been critical of the policy and concluded that the government's estimates of the impact on spending are over-optimistic. The source of this criticism is a misunderstanding of the mechanism through which the tax cut will have an impact. In fact, we believe the government's estimates are overly-pessimistic. 2. There are two mechanisms through which the temporary VAT cut might affect spending: first, it will increase spending power, making households feel as if they have more income. This mechanism is likely to be small partly because the tax cut increases income only for one year, and so the increase in total lifetime resources is very small, and partly because the lost revenue will have to be paid back. 3. However, the second (often ignored) mechanism is likely to be much more important. This second mechanism is the effect that the tax cut will have through changing the price of goods bought in 2009 compared to 2010: the cost of goods bought in 2009 has fallen compared to goods bought in 2010 and this change in prices gives an incentive to bring forward consumer spending to this year, rather than waiting until next. 4. Economic evidence on households' willingness to move spending from one year into an earlier (or later) year suggests that a 1% fall in the price today will translate into a 1% increase in spending. Since roughly only half of goods purchased are subject to VAT, the cut in the rate by 2.5% is like a cut in prices today by 1.25% and we would expect this to boost spending by about 1.25% over what it would otherwise be. 5. Of course, this issue of what the spending would otherwise be is crucial: we will not now know what spending in 2009 would have been without the cut in VAT and even with the VAT cut, spending is likely to decline. Our point is simply that economic analysis shows that the cut in VAT will make the situation significantly less bad than it might otherwise have been. 6. A natural comparison to the fiscal stimulus of a cut in VAT is a monetary stimulus through a cut in the interest rate: both make the price of spending today low compared to next year - an interest rate cut makes saving less attractive than current spending, as does the cut in VAT. The 1.25% fall in prices due to the cut in VAT reduces the price of spending today by more than a 1% point cut in the interest rate. It is surprising that some commentators have labeled the former as "small", while the latter would typically be considered a large cut. 7. There is however a difference between cutting interest rates and cutting VAT: a cut in interest rates penalises savers, whose spending power falls, and rewards borrowers. By contrast, the cut in VAT increases the spending power of savers (as well as borrowers) and this seems a fairer way to stimulate the economy.

Alleviating Linear Ecological Bias and Optimal Design with Subsample Data

In this paper, we illustrate that combining ecological data with subsample data in situations in which a linear model is appropriate provides three main benefits. First, by including the individual level subsample data, the biases associated with linear ecological inference can be eliminated. Second, by supplementing the subsample data with ecological data, the information about parameters will be increased. Third, we can use readily available ecological data to design optimal subsampling schemes, so as to further increase the information about parameters. We present an application of this methodology to the classic problem of estimating the effect of a college degree on wages. We show that combining ecological data with subsample data provides precise estimates of this value, and that optimal subsampling schemes (conditional on the ecological data) can provide good precision with only a fraction of the observations

The Impact of Communication Methods on Online Cooperative Play with Non-Familiar Co-Players

Multiplayer play is commonplace within contemporary digital games, with many requiring collaboration or cooperation between multiple players to effectively achieve gameplay objectives. Often noted as an integral part of successful cooperative play is communication, with commercial online games most commonly featuring some permutation or implementation of mediated vocal communication (Voice Chat), or written communication (Text Chat). This thesis explores the influence of the method of communication available to players over several facets of player experience and player behaviour within the context of online multiplayer play between non-co-located non-familiar co-players. Through this we broaden the understanding of the interplay between communication and player experience and to inform the design of future commercial multiplayer games. In fulfilment of these research aims, we conduct a participant study using an experimental online multiplayer 3D puzzle-platform game artefact, designed under the influence of a taxonomy of collaborative multiplayer game design elements. This study tasks pairs of non-familiar participants to complete a series of cooperative challenges, each focusing of differing gameplay elements, using one of either Voice Chat or Predefined-Text Chat, before evaluating their play experiences through validated questionnaires and interviews. From this research we find that different facets of player experience are influenced to differing extents; the immersion facet of player experience is not influenced by the communication used, whilst the degree of social presence that was experienced is significantly greater for participants using Voice Chat. This research also indicates several influences on player behaviour, both strategically and socially, that are associated with the use of differing communication methods

Novel Biomarkers Associated with Deep Venous Thrombosis: A Comprehensive Review

Primary and recurrent venous thromboembolic disease (VTE, deep venous thrombosis and pulmonary embolism) remain a significant source of morbidity and mortality in the hospitalized patient. Non-specific subjective complaints and lack of specific objective findings related to acute deep venous thrombosis (DVT) and pulmonary embolism (PE) complicate the diagnosis. There remains no single serum marker available to exclusively confirm the diagnosis of VTE. While D-dimer is highly sensitive and useful for diagnostic exclusion, it lacks the specificity necessary for diagnostic confirmation resulting in the need for a variety of additional studies (i.e.: duplex ultrasound, venography, V/Q scanning, helical thoracic and pelvic CT scans and pulmoary angiography). There is evolving research supporting the utility of various plasma markers as novel “biomarkers” for VTE including selectins, microparticles, interleukin-10 and other cytokines. This review attempts to examine recent literature assessing the utility of P-selectin, microparticles, D-dimer, E-selectin, thrombin, interleukins and fibrin monomers in the diagnosis and guidance of therapy for VTE

Geogenomic segregation and temporal trends of human pathogenic Escherichia coli o157:H7, Washington, USA, 2005-2014

The often-noted and persistent increased incidence of Escherichia coli O157:H7 infections in rural areas is not well understood. We used a cohort of E. coli O157:H7 cases reported in Washington, USA, during 2005–2014, along with phylogenomic characterization of the infecting isolates, to identify geographic segregation of and temporal trends in specific phylogenetic lineages of E. coli O157:H7. Kernel estimation and generalized additive models demonstrated that pathogen lineages were spatially segregated during the period of analysis and identified a focus of segregation spanning multiple, predominantly rural, counties for each of the main clinical lineages, Ib, IIa, and IIb. These results suggest the existence of local reservoirs from which humans are infected. We also noted a secular increase in the proportion of lineage IIa and IIb isolates. Spatial segregation by phylogenetic lineage offers the potential to identify local reservoirs and intervene to prevent continued transmission