Estimating the Social Marginal Cost of Public Funds

Shun-ichiro Bessho and Masayoshi Hayashi

Public Finance Review, 2013, vol. 41, issue 3, 360-385

Abstract: In this study, we recast the formula of the social marginal cost of public funds (SMCF) and highlight the role of what we call individual marginal costs of public funds (IMCF). After elaborating on aspects of distributional weights, we estimate the wage elasticity of labor supply and the IMCFs on a household basis. This allows us to explore not only the distributions of the elasticity and the IMCFs but also their relations to household income, which helps us assess the assumptions made in previous studies. Further, we use the SMCF estimates to evaluate the system of personal income taxes in Japan.

Keywords: social marginal cost of public funds; distributional weights; progressive taxation; Japan (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Estimating the Social Marginal Cost of Public Funds: A Micro-data Approach (2011)
Working Paper: The Social Cost of Public Funds: The Case of Japanese Progressive Income Taxation (2005)
Working Paper: Social marginal cost of public funds: A microdata estimation for the Japaneseprogressive income tax system (in Japanese) (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:41:y:2013:i:3:p:360-385

DOI: 10.1177/1091142113475699

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