Votes or Money? Theory and Evidence from the US Congress.

We consider the effects of demographic and expenditure variables on consumer demand in a system of Engel curves using a smooth coefficient semiparametric model where the expenditure effects on the budget shares vary nonparametrically with demographic variables such as the age of head and number of children in the household. Our findings, based on UK micro data, suggest that with a smooth coefficient semiparametric model there is no need for nonlinear logarithmic expenditure effects in the budget shares. Furthermore, we find evidence of a trade-off between demographic and expenditure effects in Engel curves and that a rank-2 system of Engel curves where the logarithmic expenditure effects are allowed to vary with demographic characteristics either nonparametrically or as a third degree polynomial function cannot be rejected against a rank-3 (quadratic logarithmic) model. The implications on household behaviour and welfare are also examined.Preference Heterogeneity, Rank Test, Demand Systems

Nesting Quadratic Logarithmic Demand Systems

We propose a new generalised rank-3 demand system which nests all known (and new) rank-3 and rank-2 demand systems derived from the Quadratic Logarithmic (QL) cost function. We investigate its statistical adequacy against commonly en-countered alternatives using U.K. household data.quadratic Logarithmic demand systems, rank-3 demand systems, individual household data.

How competitive is Hong Kong against its competitors? An econometric study

This study utilizes almost ideal demand system (AIDS) models to examine Hong Kong's competitiveness as an international tourist destination in comparison with its competitors. The empirical findings of the study shed new light on the destination competitiveness literature and demonstrate that a destination's competitiveness should be examined from a market-specific perspective. The results also suggest that Hong Kong is more competitive than Macau, particularly in terms of its ability to attract Australian and mainland Chinese tourists, while price elasticity calculations suggest Singapore and South Korea are more competitive than Hong Kong

Cheating in Europe: underreporting of self-employment income in comparative perspective

Various national studies have used the expenditure method (Pissarides and Weber in J Public Econ 39(1):17–32, 1989) to estimate income underreporting by the self-employed relative to the wage earners. Within Europe, the studies mostly consider the UK or individual Nordic countries, while no data are available for most Southern European and Eastern European countries. This paper is the first to apply the expenditure method to a large number of EU countries using harmonised microdata and a common model specification to enhance cross-country comparability. We extend the number of countries studied using the expenditure method and contribute to the scarce comparative literature on tax non-compliance in general. Our estimates show substantial variation in income underreporting across countries, from under 10% to more than 40% of self-employed household income on average. The shares of underreporting do not appear to be related to the development level of the countries

Microsimulation and Policy Analysis

We provide an overview of microsimulation approaches for assessing the effects of policy on income distribution. We focus on the role of tax-benefit policies and review the concept of microsimulation and how it contributes to the analysis of income distribution in general and policy evaluation in particular. We consider the main challenges and limitations of this approach and discuss directions for future developments