A Case for Higher Public Spending

Studies by psychologists, sociologists, and economists indicate that increases in incomes beyond a moderate level are not related to happiness nor significantly with the objective quality-of-life indicators (which increase with scientific and technological breakthroughs at the global level). Yet everyone wants more money. This may be explained by environmental disruption, relative-income effects, inadequate recognition of adaptation effects, and the materialistic bias due to our accumulation instinct and advertising. These factors cause a bias towards private consumption, making public spending, especially on research and environmental protection (with their long-term and global public-good nature) well below optimal. This is made worse by economists’ emphasis on the excess burden of taxation, ignoring the negative excess burden on the spending side. As Kaplow argues, if taxes are raised in accordance to the benefits of the funded public goods at the respective income levels, no disincentive effects are involved.

Global Industrial Development: Insights From the Distribution Dynamics Approach for the Post Covid Era

The spread of COVID-19 has significantly dampened global economic activity and has also wreaked havoc on the industrial sector. Understanding the disparity and convergence of global industrial outputs is important in assessing the effectiveness of concurrent development policies. This study investigates the spatial distribution of global industrial output to unveil the disparity in industrial development and the feasibility of achieving convergence over time. Stochastic kernel analyses are carried out for national regimes to study the overall pattern of industrialization for all the countries in the world. Countries are then classified into different groups to further analyse the geographical and income effects on industrial development. The results show that disparity between the Global North and the Global South will enlarge further in the future. Industrial development in the Global North will continue to prosper, while the industrial output in many countries in the Global South just cannot reach the global average.

How Income Influences Health: Decomposition Based on Absolute Income and Relative Income Effects

Previous research has confirmed a positive association between income and health, but there are still a lot of inconsistencies on how income affects health. Indeed, this impact is caused by overlaying of absolute income and relative income effects, and only by decomposing and comparing their relative importance within an integrated framework can suggestions be made for health inequalities and health intervention. To deal with this issue, using the panel data from the 2011, 2014, and 2017 waves of the Chinese Longitudinal Healthy Longevity Survey (CLHLS), a well-designed research model is established to decompose and explore the impact. Our results indicate that relative income, rather than absolute income, has a significant negative impact on health performance, and that these associations may be causal in nature. The health inequity persists throughout the life cycle, but it remains relatively stable, without significant expansion or convergence. To some extent, the research-proposed models enrich the related literature on associations between income and health, and the empirical results suggest that as China moves to the stage of higher incomes and accelerated aging, the Chinese government should pay more attention to income inequality and be alert to the risks of “income-healthy poverty” traps.

Two extensions of consumer surplus

We study consumer surplus in a single market when (a) there is a lower bound in the consumption of the outside good and (b) the weights in the social welfare function given to consumers and firms are different. We assume quasilinear utility. When the lower bound constraint on the consumption of the outside good is binding, income effects arise in demand. In some cases, Cournot equilibrium output is below equilibrium output without this constraint because the constraint makes demand less elastic. When the weights given to consumers and firms are not identical, social welfare is not necessarily concave and profits might be negative at the unrestricted optimum. We characterize social welfare optimum with a bound on maximum losses in a class of utility functions. We offer a formula to find the percentage of welfare losses due to oligopoly in this case.

Effects of Income and Material Deprivation on Children’s Life Satisfaction: Evidence from Longitudinal Data for England (2009–2018)

A plethora of research shows that income is an important factor in adult’s life satisfaction, but research ascertaining its importance for children’s life satisfaction is scant. Using a largescale nationally representative longitudinal survey with children aged 10–15, we estimate comprehensive life satisfaction models that account for heterogeneity in exogenous circumstances in children’s lives, focussing on family income and material deprivation. We find empirical support for the hypothesis that children are more satisfied with their lives, the more income their family has and the less material deprivation they experience throughout their teens. There are, however, differences across age groups with children aged 12–15 experiencing greater life satisfaction losses on account of lower family material wellbeing than younger children. Overall, income effects for older children are small but statistically significant when accounting for unobserved individual differences.

Evaluation of Status and Income Effects of Admission and Referral of Patients in Need of Vascular Surgery Service in Hospitals of Iran University of Medical Sciences

Background: Admission and dispatch of patients is considered as part of the patient treatment process. The aim of this study was to investigate the status and income effects of admission and dispatch of patients in need of vascular surgery in hospitals of Iran University of Medical Sciences in 2018-2019. Methods: The present study is a descriptive cross-sectional study in which a checklist was compiled and the required information about admission and dispatch of patients in Iran University of Medical Sciences was extracted from the MCMC (Medical Care Monitoring Center) system. In order to extract the income of services related to vascular surgery service from the average income of each patient file in need of this service, university hospitals were used. The sampling method was census and 14,481 patients admitted and dispatched were examined. The data were analyzed by descriptive statistics using Excel software. Results: The total number of registrations for dispatch of vascular surgery service was 605, 378 of which were successful. Of these, 145 were from hospitals affiliated to private hospitals and other hospitals affiliated to other medical universities, 233 were related to vascular surgery admissions, and 227 patients were related to failure to dispatch and death. The lost income due to dispatching patients is equal to 4,875,100,680 Rials. Also, the hospitals affiliated to the university have gained income equal to 7,833,782,472 Rials by admitting and not dispatching these patients. Conclusion: The findings showed that the lost income due to dispatching patients requiring vascular surgery is 4,875,100,680 Rials. Also, the earned income resulting from the existence of medical facilities in the field of the patients’ admission to the hospitals affiliated to the university is 7,833,782,472 Rials.

Using Labor Supply Elasticities to Learn about Income Inequality: The Role of Productivities versus Preferences

Using a general labor supply model in which individuals choose how much to work conditional on productivities and preferences for consumption relative to leisure, we show that the mapping from earnings and hours worked to productivities and preferences can be expressed entirely in terms of reduced-form labor supply elasticities. We investigate the roles that productivities and preferences play in driving income inequality in the United States. Benchmark labor supply elasticity estimates from the literature imply that productivities drive most income inequality. Preferences become increasingly important relative to benchmark, with larger income effects or larger differences between earnings and hours-worked elasticities. (JEL J22, J24, D31, J31, H24, H31)