Alcohol/Leisure Complementarity: Empirical Estimates and Implications for Tax Policy

This paper provides a first attempt to estimate the cross-price elasticity between alcoholic beverages and leisure, which is critical for assessing how much alcohol taxation might be warranted on fiscal grounds. We estimate an Almost Ideal Demand System defined over alcohol, leisure, and other goods, using data from the Consumer Expenditure Survey and other sources. Our results suggest that alcohol is a relative complement for leisure over a range of specifications. This implies that the optimal alcohol tax may substantially exceed the Pigouvian tax, reinforcing the efficiency case for higher taxation. These findings should be viewed as preliminary however, given a number of data and other limitations of the analysis.alcohol tax, demand system, alcohol, labor supply, labor tax

Estimates from a Consumer Demand System: Implications for the Incidence of Environmental Taxes

Most studies suggest that environmental taxes are regressive, and thus are unattractive policy options. We consider the distributional effects of a gasoline tax increase using three welfare measures and under three scenarios for gas tax revenue use. To incorporate behavioral responses we use Consumer Expenditure Survey data to estimate a consumer demand system that includes gasoline, other goods, and leisure. We find that the gas tax is regressive, but that returning the revenue through a lump-sum transfer more than offsets this, yielding a net increase in progressivity. We also find that ignoring behavioral changes in distributional calculations overstates both the overall burden of the tax and its regressivity.

Empirical Estimates for Environmental Policy Making in a Second- Best Setting

This study estimates parameters necessary to calculate the optimal second-best gasoline tax, most notably the cross-price elasticity between gasoline and leisure. Prior work indicates that in a second-best setting with distortionary income taxes, both the cost of environmental regulation and the optimal environmental tax rate depend crucially on the cross-price elasticity between a polluting good and leisure. However, no prior study on second-best environmental regulation has estimated this elasticity. Using household data, we find that gasoline is a relative complement to leisure, and thus that the optimal gasoline tax is significantly higher than marginal damages–the opposite of the result suggested by the prior literature. Following this approach to estimate cross-price elasticities with leisure for other major polluting goods could strongly influence estimates of optimal environmental taxes.second-best environmental taxes, optimal taxes, tax interactions, demand system

Fiscal and Externality Rationales for Alcohol Taxes

This paper develops and implements an analytical framework for estimating the optimal levels and welfare effects of alcohol taxes and drunk-driver penalties, accounting for externalities and how policies interact with the broader fiscal system. We find that the fiscal component of the optimal alcohol tax exceeds the externality-correcting component under many parameter scenarios and assumptions about revenue recycling; overall, the optimal tax is anything from three to more than ten times the current tax. For more incremental reforms, however, welfare gains from stiffer drunk-driver fines and non-pecuniary penalties are larger, even though they involve implementation costs, possible first-order deadweight losses, and fiscal considerations play a minor role. In contrast to current practice, fiscal considerations warrant relatively heavier taxation of beer and relatively lighter taxation of spirits.alcohol tax, drunk-driver penalty, fiscal effects, external costs, welfare effects

Development of a reliable, valid measure to assess parents' and teachers' understanding of postural care for children EKHUT Internal Grant Reportwith physical disabilities.

Schools play an important role in facilitating the day time aspects of postural management programmes for children with physical disabilities, enabling children to participate at school and engage in functional tasks associated with school work; however, the majority of teachers and teaching assistants are inexperienced and lack confidence in how to manage the needs of children with a physical disability (Hutton & Coxon 2010). “Definition: A postural management programme is a planned approach encompassing all activities and interventions which impact on an individual's posture and function. Programmes are tailored specifically for each child and may include special seating, night-time support, standing supports, active exercise, orthotics, surgical interventions, and individual therapy sessions. Gericke (2006) A small exploratory study of the views of teachers and teaching assistants recommended that information about postural care be made widely available to parents and teachers in order to assist them in their role as care givers for children with disabilities. In response to these findings, a booklet, the “A-Z of Postural Care” was developed by a team of researchers, therapists, teachers and parents of children with a disability (Hutton et al., 2009)