Tax-Induced Inequalities in the Sharing Economy

2022 ◽  
Author(s):  
Yao Cui ◽  
Andrew M. Davis
Keyword(s):  
Operations Management ◽  
The United States ◽  
Sharing Economy ◽  
Unintended Consequence ◽  
Socioeconomic Impact ◽  
Tax Rates ◽  
Entire Space ◽  
Difference In Differences ◽  
Heterogeneous Treatment Effects ◽  
Shared Space

The growth of sharing economy marketplaces like Airbnb has generated discussions on their socioeconomic impact and lack of regulation. As a result, most major cities in the United States have started to collect an “occupancy tax” for Airbnb bookings. In this study, we investigate the heterogeneous treatment effects of the occupancy tax policy on Airbnb listings, using a combination of a generalized causal forest methodology and a difference-in-differences framework. While we find that the introduction of the tax significantly reduces both listing revenues and sales, more importantly, these effects are disproportionately more pronounced for residential hosts with single shared-space (nontarget) listings versus commercial hosts with multiple properties or entire-space (target) listings. We further show that this unintended consequence is caused by customers’ discriminatory tax aversion against nontarget listings. We then leverage these empirical results by prescribing how hosts should optimally set prices in response to the occupancy tax and identify the discriminatory tax rates that would equalize the tax’s effect across nontarget and target listings. This paper was accepted by Victor Martínez-de-Albéniz, operations management.

Don’t Tax My Dreams: The Lottery Sales Response to Gambling Tax Changes

2020 ◽  
Vol 48 (5) ◽  
pp. 627-649
Author(s):  
Luke P. Rodgers
Keyword(s):  
New Hampshire ◽  
Informed Choice ◽  
The United States ◽  
Tax Revenue ◽  
Tax Rates ◽  
Difference In Differences ◽  
Data Set ◽  
Cross Border ◽  
Border Areas ◽  
Tax Changes

Legalized gambling is a popular source of tax revenue in the United States. However, the ability to increase gambling tax revenue through higher tax rates is limited by the presence of nontaxable and cross-border substitutes. In July 2009, New Hampshire introduced a 10 percent tax on gambling winnings, substantially reducing the expected value of a gamble while leaving other aspects of gambling unaffected; the tax was repealed in May 2011. Using a novel data set and a difference-in-differences framework, I document significant reductions in New Hampshire lottery sales under the tax policy and estimate a price elasticity greater than −1. The response is consistent with informed choice by consumers, and larger changes in border areas provide suggestive evidence of cross-border shopping.

The Interplay Between Online Reviews and Physician Demand: An Empirical Investigation

2021 ◽  
Author(s):  
Yuqian Xu ◽  
Mor Armony ◽  
Anindya Ghose
Keyword(s):  
Service Quality ◽  
Operations Management ◽  
Choice Model ◽  
Healthcare Delivery ◽  
Online Reviews ◽  
The United States ◽  
Patient Choice ◽  
Data Set ◽  
Textual Information ◽  
Time Service

Social media platforms for healthcare services are changing how patients choose physicians. The digitization of healthcare reviews has been providing additional information to patients when choosing their physicians. On the other hand, the growing online information introduces more uncertainty among providers regarding the expected future demand and how different service features can affect patient decisions. In this paper, we derive various service-quality proxies from online reviews and show that leveraging textual information can derive useful operational measures to better understand patient choices. To do so, we study a unique data set from one of the leading appointment-booking websites in the United States. We derive from the text reviews the seven most frequently mentioned topics among patients, namely, bedside manner, diagnosis accuracy, waiting time, service time, insurance process, physician knowledge, and office environment, and then incorporate these service features into a random-coefficient choice model to quantify the economic values of these service-quality proxies. By introducing quality proxies from text reviews, we find the predictive power of patient choice increases significantly, for example, a 6%–12% improvement measured by mean squared error for both in-sample and out-of-sample tests. In addition, our estimation results indicate that contextual description may better characterize users’ perceived quality than numerical ratings on the same service feature. Broadly speaking, this paper shows how to incorporate textual information into an econometric model to understand patient choice in healthcare delivery. Our interdisciplinary approach provides a framework that combines machine learning and structural modeling techniques to advance the literature in empirical operations management, information systems, and marketing. This paper was accepted by David Simchi-Levi, operations management.

Drivers, Riders, and Service Providers: The Impact of the Sharing Economy on Mobility

2021 ◽  
Author(s):  
Saif Benjaafar ◽  
Harald Bernhard ◽  
Costas Courcoubetis ◽  
Michail Kanakakis ◽  
Spyridon Papafragkos
Keyword(s):  
Operations Management ◽  
Service Providers ◽  
Sharing Economy ◽  
Car Ownership ◽  
Full Time ◽  
Ride Sharing ◽  
Finite Set ◽  
Nonatomic Game ◽  
Payoff Functions ◽  
The Impact

It is widely believed that ride sharing, the practice of sharing a car such that more than one person travels in the car during a journey, has the potential to significantly reduce traffic by filling up cars more efficiently. We introduce a model in which individuals may share rides for a certain fee, paid by the rider(s) to the driver through a ride-sharing platform. Collective decision making is modeled as an anonymous nonatomic game with a finite set of strategies and payoff functions among individuals who are heterogeneous in their income. We examine how ride sharing is organized and how traffic and ownership are affected if a platform, which chooses the seat rental price to maximize either revenue or welfare, is introduced to a population. We find that the ratio of ownership to usage costs determines how ride sharing is organized. If this ratio is low, ride sharing is offered as a peer-to-peer (P2P) service, and if this ratio is high, ride sharing is offered as a business-to-customer (B2C) service. In the P2P case, rides are initiated by drivers only when the drivers need to fulfill their own transportation requirements. In the B2C case, cars are driven all the time by full-time drivers taking rides even if these are not motivated by their private needs. We show that, although the introduction of ride sharing may reduce car ownership, it can lead to an increase in traffic. We also show that traffic and ownership may increase as the ownership cost increases and that a revenue-maximizing platform might prefer a situation in which cars are driven with only a few seats occupied, causing high traffic. We contrast these results with those obtained for a social welfare-maximizing platform. This paper was accepted by Charles Corbett, operations management.

Enhancing Regulatory Decision Making for Postmarket Drug Safety

2021 ◽  
Author(s):  
Vishal Ahuja ◽  
Carlos A. Alvarez ◽  
John R. Birge ◽  
Chad Syverson
Keyword(s):  
Decision Making ◽  
Operations Management ◽  
The United States ◽  
Pharmaceutical Products ◽  
Unintended Consequences ◽  
Surveillance Systems ◽  
Veterans Health ◽  
Health Administration ◽  
Regulatory Decision ◽  
Increased Risk

The U.S. Food and Drug Administration (FDA) regulates the approval and safe public use of pharmaceutical products in the United States. The FDA uses postmarket surveillance systems to monitor drugs already on the market; a drug found to be associated with an increased risk of adverse events (ADEs) is subject to a recall or a warning. A flawed postmarket decision-making process can have unintended consequences for patients, create uncertainty among providers and affect their prescribing practices, and subject the FDA to unfavorable public scrutiny. The FDA’s current pharmacovigilance process suffers from several shortcomings (e.g., a high underreporting rate), often resulting in incorrect or untimely decisions. Thus, there is a need for robust, data-driven approaches to support and enhance regulatory decision making in the context of postmarket pharmacovigilance. We propose such an approach that has several appealing features—it employs large, reliable, and relevant longitudinal databases; it uses methods firmly established in literature; and it addresses selection bias and endogeneity concerns. Our approach can be used to both (i) independently validate existing safety concerns relating to a drug, such as those emanating from existing surveillance systems, and (ii) perform a holistic safety assessment by evaluating a drug’s association with other ADEs to which the users may be susceptible. We illustrate the utility of our approach by applying it retrospectively to a highly publicized FDA black box warning (BBW) for rosiglitazone, a diabetes drug. Using comprehensive data from the Veterans Health Administration on more than 320,000 diabetes patients over an eight-year period, we find that the drug was not associated with the two ADEs that led to the BBW, a conclusion that the FDA evidently reached, as it retracted the warning six years after issuing it. We demonstrate the generalizability of our approach by retroactively evaluating two additional warnings, those related to statins and atenolol, which we found to be valid. This paper was accepted by Vishal Gaur, operations management.

The Rise of the Super-Rich

2012 ◽  
Vol 77 (5) ◽  
pp. 679-699 ◽  
Author(s):  
Thomas W. Volscho ◽  
Nathan J. Kelly
Keyword(s):  
Trade Openness ◽  
The United States ◽  
Single Equation ◽  
Economic Factors ◽  
Tax Rates ◽  
Real Estate Markets ◽  
Asset Bubbles ◽  
Equation Error ◽  
Short Run ◽  
Income Concentration

The income share of the super-rich in the United States has grown rapidly since the early 1980s after a period of postwar stability. What factors drove this change? In this study, we investigate the institutional, policy, and economic shifts that may explain rising income concentration. We use single-equation error correction models to estimate the long- and short-run effects of politics, policy, and economic factors on pretax top income shares between 1949 and 2008. We find that the rise of the super-rich is the result of rightward-shifts in Congress, the decline of labor unions, lower tax rates on high incomes, increased trade openness, and asset bubbles in stock and real estate markets.

scholarly journals Sustainability of micro-enterprises in the digital economy

2021 ◽  
Vol 250 ◽  
pp. 06008
Author(s):  
Oksana Mukhoryanova ◽  
Larisa Kuleshova ◽  
Nina Rusakova ◽  
Olga Mirgorodskaya
Keyword(s):  
Sustainable Development ◽  
The United States ◽  
Sharing Economy ◽  
Digital Economy ◽  
Small Enterprises ◽  
The European Union ◽  
The Sustainable Development ◽  
Traditional Industry ◽  
The Impact ◽  
Micro Enterprises

This paper aims at investigating the predisposition leading to the sustainability of micro-enterprises in the digital economy, especially the sharing economy. This area represents a new field since the research of the impact of the sharing economy on small enterprises is still in its infancy. We study the role of the entrepreneurial approach and entrepreneurial philosophy of the small business with regard to the digitalization and the sustainable development and growth using examples from the European Union and the United States. Some common features and trends are derived and the outcomes are discussed. Our results point at the fact that by creating an economy for micro-entrepreneurs, the sharing economy thrives on traditional industry disrupted by technology. Since micro-enterprises constitute a backbone of the economy in many developed and developing countries, more research is required to shed the light of the sustainable development of these types of enterprises in the globalized and digitalized world.

scholarly journals Replacement depreciation and price regulation

2006 ◽  
Vol 17 (3) ◽  
pp. 10-20
Author(s):  
IJ Lambrechts
Keyword(s):  
The United States ◽  
Natural Monopoly ◽  
Price Regulation ◽  
Liquid Fuels ◽  
Economic Regulation ◽  
Tax Rates ◽  
Historical Cost ◽  
Investment Rates ◽  
The Difference ◽  
The Moment

Price regulation occurs quite commonly amongst natural monopolies which frequently include public utilities. In South Africa and in certain countries in Africa, there has recently been a revival of price regulation in certain industries and enterprises, where competition is limited or non-existent. Price regulation can be applied in a multitude of ways. Because of the importance of the price levels (historical and replacement) in the price setting exercise, the focus in this paper will be on the issue of depreciation to arrive at the final prices. The electricity utility industry was historically viewed as a highly mature and heavily regulated natural monopoly. In many parts of the world, electricity utilities have already been deregulated to a large extent and in the United States the process was preceded by a process of unbundling or ringfencing of the main divisions, i.e. generation and distribution. Even the network component of transmission, traditionally seen as natural monopolies, was deregulated to a large extent. The deregulation process, whether fully or partially, emphasised the requirement for a detailed explanation for a specific price level. The need for acceptable and transparent selling prices has, therefore, not disappeared. Regulatory pricing is consequently a vital component of pricing at this stage and in the restructured industry it will continue to play an important role because of a limited number of participants. In other sectors of the South African energy industry too, the deregulation process has either not started or has not been completed. Price regulation is presently and will in future be applicable to the liquid fuels industry, which includes the pipeline of Petronet as well as gas pipelines. Other industries which are being price regulated at the moment include water, medicine, telecommunication (fixed lines) and postal rates. Although the economic regulation for these industries may differ substantially, the principles applying to depreciation calculations would be similar. Replacement depreciation produces lower profit figures during periods of inflation. Quoted companies often oppose this system because of a lack of taxation recognition on income and the adverse effect on earnings per share. This paper covers the calculation of depreciation by price regulators where assets are not diversified (single assets). Shorter depreciation lifetimes based on historical cost result in an automatic provision for replacement depreciation. The extent of the provision would be a function of the difference between the actual and selected lifetimes, income tax rates, re-investment rates and the extent of the financial gearing ratio. Provision for replacement depreciation may be reduced significantly, if not reduced completely, by reducing depreciation lifetimes.

scholarly journals The Tax Cuts and Jobs Act and the Middle Class

2019 ◽  
Vol 26 (01) ◽  
pp. 53
Author(s):  
Deborah Combs ◽  
Brian Nichols
Keyword(s):  
Middle Class ◽  
The United States ◽  
Census Bureau ◽  
Tax Rates ◽  
United States Census ◽  
United States Census Bureau ◽  
Definition Of ◽  
Almost All ◽  
Jobs Act ◽  
Tax Cuts

This paper explores how the tax cuts and jobs act of 2017 impacts middle-class taxpayers by calculating the tax liability at different levels of income and deductions in 2017 versus 2018. The results confirm the statements supporting the positive effect of the tax change for the middle class. The tax cut and jobs act eliminates personal exemptions, changes the standard deductions at various incomes and family sizes, and lowers marginal tax rates. After providing details of the act, this research examines the definition of the U.S. middle class by using prior research from the Pew Research Center, the United States Census Bureau, and the federal reserve to determine which income levels are attributable to the middle class. Then the tax liability for these income classes is calculated for single and married filing jointly taxpayers in both 2017 and 2018 to determine if the tax cuts and jobs act reduces the tax liability for the middle class. The results show that in almost all scenarios the tax liability in 2018 will be lower than in 2017, regardless of whether standard or itemized deductions are taken. The marriage penalty is no longer applicable, and the new tax act provides a substantial benefit to large families

Abstract 9401: Medicare Readmission Penalties and Their Socioeconomic Correlates in Urban Hospitals

Circulation ◽  
2014 ◽  
Vol 130 (suppl_2) ◽  
Author(s):  
Kim A Williams ◽  
Muhammad S Hamid ◽  
Arshad A Javed ◽  
Amy M Horton
Keyword(s):  
Inner City ◽  
Affordable Care Act ◽  
Safety Net ◽  
The United States ◽  
Unintended Consequence ◽  
Large Cities ◽  
Urban Hospitals ◽  
Low Educated ◽  
Socioeconomic Data ◽  
The City

In 2013, 2,200 U.S. hospitals forfeited more than $280 million in Medicare funds due to readmission penalties (RPs) for heart failure, pneumonia and myocardial infarction stipulated by the Affordable Care Act. This study evaluated the RPs in the hospitals of large cities, in comparison with other areas within and between states. Methods: Medicare RPs for 2013 (ranging 0 to 1%) were compared along with census and socioeconomic data for the largest city in each of 49 states in the United States, excluding Maryland due to its ongoing Medicare demonstration project. Improvements in RPs for 2014 in each urban area were tabulated. Results: There was a significant correlation between RPs and the size of the population of the cities (r = 0.37, p<0.01), with larger cities receiving higher penalties. For example, Detroit, MI’s 5 hospitals and Newark, NJ’s 3 hospitals have the highest average RPs (0.9%) than the hospitals in other largest cities. The RPs correlated moderately with a higher percentage of low-educated people in the city (r=0.53, p<0.001), and weakly but negatively with the percentage of high-educated people (r= -0.29, p<0.05) in the city. The rate of unemployment also correlated positively and significantly with the RPs (r=0.50, p<0.001). Conclusion: RPs reduce Medicare payments to inner-city hospitals, such as those in Detroit, MI and Newark, NJ, and disproportionately lower payments to large cities with poorer, underemployed and undereducated populations. This may have the unintended consequence of further reducing access care from safety-net hospitals.

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